(TO 


18 


VIEW  OF  THE  STOCK  EXCHANGE    DURING    THE  1'ANH 


INSIDE   LIFE 

IN 

WALL  STREET; 

OB 

How  GREAT  FORTUNES  ARE  LOST  AND  WON, 


DISCLOSURES  OF  DOINGS  AND  DEALINGS  ON  'CHANGE, 

INCLUDING 

THE    SECRET  HISTORY 

OF  THE 

NOTED   SPECULATIONS  SINCE  THE  CRASH  OF  1857, 

THE    GREAT    RISES     AND     PANICS    OP    THE     AGE,    AND    HOW     THEY 

•WERE     PRODUCED,      INCLUDING     FULL      DESCRIPTIONS 

OF    THE      "BLACK.    FRIDAY"     OF    1869,    AND 

AN  INSIDE  YIEW  OF  THE  GREAT 

PANIC    OF     1873. 


«!l  I  ^afa,  anb  part  of  fofcicfc  I  m*&. 


BT 

WM.  WORTHINGTOX  FOWLER, 
WALL  STREET  CORRESPONDENT  OF  BOSTON  COMMERCIAL  BULLETIN. 

A  Sequel  to  Ten  lean  in  Wall  Street. 


ILLUSTRATED  BY  ARTHUR  LUMLEY. 


HARTFORD,   CONN.: 

DTJSTIN,     OILMAN     &     CO. 

QUEEN    CITY    PUBLISHING    CO. 

CINCINNATI,  OHIO. 

1873. 


Entered,  according  to  Act  of  Congress,  in  the  year  1873,  by 

DUSTIN,  OILMAN  &  CO., 
in  the  Office  of  the  Librarian  of  Congress  at  Washington. 


INTRODUCTORY. 


LOW  came  you  to  go  into  Wall  street?"  is  a  question  often 
asked,  especially  of  such  as  have  experienced  vicissitudes 
of  good  and  bad  fortune  in  the  current  speculations  of  that 
famous  thoroughfare.  The  candid  answer  will  invariably  be 
;  Because  I  wanted  to  make  money  faster  than  in  my  trade 
or  profession."  Lawyers  are  not  content  with  their  costs,  mechanics  with 
their  wages,  doctors  with  their  fees,  merchants  with  their  gains,  clergymen 
with  their  salaries,  capitalists  with  their  profits,  money-lenders  with  their 
plain  seven  per  cent. ;  they  would  make  one  hundred  per  cent,  in  an 
hour  and  then  double  it  the  next ;  "  it  costs  so  much  to  live,  you  know, 
now-a-days,"  and  accordingly  they  betake  themselves  to  the  stock-market, 
where  Vanderbilt  and  Gould  and  others  of  that  ilk  are,  according  to  the 
popular  belief,  making  cent  per  cent,  almost  every  fine  day. 

What  fallacies  of  financial  logic  !  what  moonshine ! 

Standing  in  the  portico  of  the  Stock  Exchange  on  the  20th  of  Septem- 
ber and  the  15th  of  October,  1873,  those  black  and  bitter  days  in  the 
reckoning  of  Wall  street,  we  saw  the  bolts  fall  out  of  the  great  darkness, 
saw  the  proudest  and  strongest  smitten  to  the  earth,  saw  the  fabric  which 
years  had  builded,  melt  away  like  an  unsubstantial  pageant,  saw  the  long 
lines  of  mourners  from  the  house  of  Yanderbilt  and  the  house  of  Gould, 
saw  the  rueful  faces  and  heard  the  doleful  lamentations. 

Thereupon  we  bethought  us  of  the  fable  of  the  race  between  the  hare 
and  the  tortoise,  and  remembered  the  proverb  which  teaches  that  "  the 
longest  way  around  is  the  shortest  way  home ;"  and  so  we  took  up  our  pen 
and  wrote  the  Sequel  to  Ten  Years  of  Speculation  in  Wall  Street. 

If  some  of  the  facts  related  in  the  following  narrative  are  familiar  to  the 
public,  others  are  new.  The  course  of  speculation  in  railway  shares  and 
the  causes  of  the  great  panics,  most  especially  of  that  mighty  convulsion 
by  which  the  whole  commercial  system  is  now  rocking  to  its  base,  will 
furnish  food  for  the  imagination  as  well  as  the  reasoning  faculties  of  our 
readers.  If  they  will  only  learn  the  lesson  it  teaches  and  ponder  over  the 
moral  of  this  "  strange  eventful  history,"  the  writer  will  feel  he  has  not 
used  his  pen  in  vain. 


20C3449 


1.  VIEW  OF  STOCK  EXCHANGE  DURING  PANIC,     -  Frontispiece. 

2.  CORNELIUS  VANDERBILT,                       -  -    47 

3.  DANIEL  DREW,  -          47 

4.  LEONARD  W.  JEROME,    -           -           -           -  -           -47 

5.  JACOB  LITTLE,           -            -            -            -  -            •          47 

6.  CURBSTONE  BROKERS,    -           -           -           -  -           -    83 

7.  VIEW  OF  SUB-TREASURY,     -           -           -  101 

8.  ADDISON  G.  JEROME,      -           -           -           -  -           -  151 

9.  HENRY  KEEP,                                                 -  -           -        151 

10.  JAY  GOULD,         -            -           -            -            -  -            -  151 

11.  JAMES  FISK,  JR.,       -                                  -  151 

12.  VIEW  OF  GOLD  ROOM,     ...  -            -  183 

13.  HALL  OF  BROKERS  BOARD,    -  231 

14.  How  A  FORTUNATE  OPERATOR  SPENDS  His  MONEY,  -  -  257 

15.  VAULTS  OF  THE  STOCK  EXCHANGE,  -        273 

16.  BUBBLE  COMPANIES — FIGHTING  FOR  STOCK — LOOKING  FOR 

DIVIDENDS,     -           -           -  •«,-._  305 

17.  LOCKING  UP  GREENBACKS,    -           -  •••>'_        369 

18.  END  OF  A  GREAT  SPECULATOR,  -           -  423 

19.  DREAM  OF  A  SPECULATOR,    -  -                    433 

20.  A  BROKER'S  OFFICE — ENTER  VERDANT  GREEN,  -           -  459 

21.  PLOTTING  GREAT  GOLD  RING  OF  1869,        ...        509 

22.  SCENES  DURING  PANIC  OF  1873,             -           -  -           -  583 


CONTENTS. 


CHAPTER  I. 

WALL    STREET. 

Popular  Ideas  of  Wall  Street — The  Memories  it  Awakens — Its  An- 
nals— The  Centre  of  Speculation — The  Money  Forces — Riches 
•with  Wings — Different  Classes  of  Speculators— Bulls  and  Bears 
— The  "  Long  "  and  "  Short  "  of  it — Pools,  Rings  and  Cliques — 
How  they  are  Formed — Bears  in  a  "  Corner  " — The  Kings  and 
Satraps  of  the  Market— "Puts  and  Calls,"  what  are  they?— 
The  Ghosts  of  the  Street— A  Speculator's  Life— The  Close  of  a 
Misspent  Career, 19 

CHAPTER  II. 

THE  STOCK  EXCHANGE  AND  GOLD  ROOM. 

The  Focus  of  Speculation — The  "  Long  Room  "  on  a  Field  Day — 
Portraits  of  Operators — History  of  the  Board  of  Brokers — The 
Public  Board — Queer  Characters — Volume  of  Business — How 
it  is  Done — Brokers'  Vocabulary — Margins,  Differences  and 
Options — Machinery  of  Business — A  Broker's  Buckler — The 
Gold  Room  in  New  Street— Rise  of  the  Gold  Board— The  Firm 
of  We,  Us  &  Co.— The  Gold  Bank,  and  how  it  Clears  Gold, 
and  Collects  Differences, 46 

CHAPTER  III. 

THE  FIRST  VENTURE. 

A  New  York  Boarding-House  in  Perspective— Wall  Street  Patter — 
Curb-Stone  Brokers  "At  Home" — A  Flyer  on  Old  Southern — 
A  Bird  of  Omen— The  Regular  Brokers  in  Their  Work-shop 
— Jacob  Little — His  Career — The  Napoleon  of  the  Bears — A 
Shrewd  Move — He  Scatters  the  Bulls— His  Character  and  Pe- 
culiarities— Old  Southern  "  Firm  at  the  Close," 78 


VI  CONTENTS. 

CHAPTER  IV. 

PROFIT  AND   LOSS. 

Brokers    Adjourn  ! — Machinery    of     Business — A     Gutter-snipe's 

Cock-loft — "A    Man    may   Smile,   and    Smile,    and    be    a" 

Broker — An  Operator's  Day-Dream — The  Old  Bear  Growls  in 
his  Den— The  Ring  Hoisting  a  Bale  of  Stock— The  First  Profit 
— A  Broker's  Account — Fingering  the  Cash— Out  of  the  Woods 
into  Wall  Street— Flyer  No.  2— The  First  Loss— A  Short  Sale 
and  the  Result— A  Wild-cat  Bank— Philocophy  of  Specula- 
tion— Beware,  Greenhorns  1 ..99 

CHAPTER  V. 

CORNELIUS  VANDERBILT  AND  DANIEL  DREW. 

"  A  Panic  in  Stocks,  and  Where  is  the  Commodore  ? — Driving  in 
Central  Park— Training  for  Wall  Street— Maxims  of  the  Vander- 
bilt  Code,  "  never  sell  what  .you  haven't  got,"  etc. — Anecdotes — 
•  Vanderbilt  the  Bull,  and  Drew  the  Bear — A  Parallel  between  the 
Two—"  Uncle  Daniel's  "  Portrait  and  Ways— The  "  Merry  Old 
Gentleman" — The  Wisdom  of  the  Serpent,  but  not  the  Harmless- 
ness  of  the  Dove — Daniel  Drew  as  an  Acrobat — Straddling  the 
Market, 118 

CHAPTER  YI. 

JOTTINGS  ON  THE  "  STREET ;"  DREW  ON  THE  WAR-PATH. 

More  Philosophy  of  Wall  Street— The  Handwriting  on  the  Wall— 
A  Haunted  Heart— The  Panic  Forgotten,  and  "  Richard  is  Him- 
self Again " — "  Country  Orders  Executed  with  Promptness  and 
Despatch  !" — The  Countrymen  Respond  to  the  Cry — A  Rustic 
Bruiser  on  Change — My  Little  Commission  Bill — The  Devourers 
of  Widows'  Houses— What  shall  I  buy,  and  How  shall  I  buy  it  ? 
Notes  on  Erie — Views  of  the  "  General " — I  buy  One  Hundred 
Erie,  and  pay  for  it,  and  what  came  of  it — Drew  the  King  of  Erie 
— He  Bulls  Erie  at  4,  and  sells  it  to  "  The  Boys  "  at  40,  ...  131 


CONTENTS.  VU 

CHAPTER  VII. 

WAR  TIMES  AND  GREENBACKS. 

PAGE. 

One  Little  Cloud  in  a  Fair  Sky — Business  Lively,  and  Crops  coming 
in  while  a  Thunder-storm  is  Brewing — The  Cloud  Gathers  and 
Bursts— Stocks  Fall  Down  and  "  Take  a  Snooze  "—New  Fields 
for  the  Speculator — The  Fortune  of  a  Chemist,  and  How  he  Trans- 
muted Saltpetre  into  Gold — The  Parentage  of  the  Greenback  Cur- 
rency—Wake Up,  Wall  Street !— The  Stimulant  Begins  to  Work 
— Music  by  the  Whole  Band ! — Stocks  on  the  Rampage — the  Un- 
der-ground Telegraph  Clicking — News  from  the  Front — The  Bulls 
Fall  Back,  but  Reorganize  and  Prepare  to  Charge  Again — An 
Army  Without  a  Leader, 144. 

CHAPTER  YIII. 

BULL-LEADERS. 

"  Circumstances  Make  Men  " — Addison  G.  Jerome — The  Napoleon 
of  the  Public  Board— His  Appearance,  Character  and  Fortunes — 
His  Fall  from  Power— John  M.  Tobin,  the  Wall  Street  Sea-rover 
— Style  and  Policy  of  his  Operations — Vanderbilt's  Lieutenant — 
New  School  of  Tactics  in  the  Stock-market — Composition  of  the 
Public  Board — Fortunes  of  some  of  its  Members — A  Bankrupt 
turns  Banker — The  Luck  of  a  "  Bummer  and  Dead  Beat " — The 

Story  of  D y — Forward  Bulls! — Stocks  on  the  March — My 

First  Visit  to  the  Public  Board,  and  what  came  of  it, 159 

CHAPTER  IX. 

PACmC  MAIL  AND  LEONARD  W.  JEROME. 

Creative  Genius  in  America — The  Opening  of  the  Golden  Gate — 
The  Battles  of  the  Steamship  Kings — The  Commodore  Makes  a 
Hearty  Lunch  off  Accessary  Transit  Company — Features  of  Pacific 
Mail  as  a  Wall  Street  Stock— It  Oscillates  like  the  Waves  of  the 
Sea — "  Unstable  as  Water  Thou  Shalt  Excel " — A  Grave-yard  for 
the  Bears — A  New  Ring  on  the  Changes  of  P.  M. — L.  W.  Jerome's 
Portrait— The  Sultan  in  Wall  Street— "I  Never  Speculate,  Sir, but 
I  will  Take  a  Little  Pacific  Mail " — A  Secesher  gives  me  "Point " 
— The  Stock  on  its  Upward  March — Bulls  Charge  with  Flying 
Artillery  in  Front, 171 


Vlll  CONTENTS. 

CHAPTER  X. 

"GOLD,  GOLD,  GOLD,  GOLD,— HOARDED,  BABTERED, 
BOUGHT  AND  SOLD." 

"Fresh  Fields  and  Pastures  New"  for  "The  Boys" — The  Gold 
Genii — The  Lobbymen  and  Politicians  Take  a  Turn — Where  all 
the  Gold  was— Secesh  at  the  Front — A  Petroleum  Maniac — I 
Take  a  Flyer  in  Oil,  and  Find  it  "  Oil  of  Joy  " — I  Go  "  Down  to 
the  Sea  in  a  Ship,"  and  What  my  Ship  Brought  when  it  Came  in 
— New  Recruits  in  William  Street — Things  are  Working — Gold 
"Breaks"  for  200  and  then  "Breaks"  to  156— Raking  in  the 
Profits— A  Sum  in  Algebra,  $73,000  +  $20,000— The  Bear-leader 
in  Distress — The  Gold  Dreamer,  and  how  his  Dream  Came  out — 
Men  and  Money  in  Wall  Street— The  Autobiography  of  $500,  .  .185 

CHAPTER  XI. 

THE  FIRST  GREAT  HARLEM  RISE. 

The  Tale  of  Three  Men  who  Met  in  a  Doorway  During  a  Storm- 
Shall  We  Sell  Harlem  Short?— The  Brokers  say  Yes— Investiga- 
tions— What  is  a  Broker's  Opinion  Good  For  ? — The  Decision  is 
Made,  and  We  "  Sell  'em  " — Vanderbilt  in  Search  of  Investments 
"I  Have  a  Few  Millions  Lying  Idle,  Sir,  and  I  Wish  to  put  it  into 
Something  that  Will  Pay"— The  Patriots  of  the  City  Hall  in  the 
Field — A  Large  Donation  to  Harlem — The  Commodore  Gets  his 
Dander  Up— The  Clown  of  the  Stocks  Plays  His  Antics— A  Miss 
is  as  Good  as  a  Mile — Legislative  Tricks — The  Stock  Mounts,  and 
the  Bears  are  Slaughtered — Harlem  the  Double-edged  Sword  of 
the  Stock-market— How  I  Came  Out— Incidents  of  the  Rise,  .  .199 

CHAPTER  XII. 

THE  BRIGADE  OF  BEARS. 

How  Bulls  are  changed  into  Bears — The  Short  Gentleman  on  the 
Anxious  Seat— A  Bear-Garden  in  William  Street— Office  of  D. 
Groesbeck  &  Co.— David  Groesbeck  the  Pupil  of  Jacob  Little,  and 
the  Partner  of  Daniel  Drew — Portraits  of  Other  Bear-operators — 

Dr.  Shelton— C 's  Fortunes — William  R.  Travers,  the  Partner 

of  Leonard  W.  Jerome — A  Lucky  Hit  on  the  Bear  Side— Anec- 


CONTENTS.  IX 

PAQB. 

dotes— The  Marshaling  of  the  Clans— The  Bull-battalion— Lock- 
wood  &  Co.,  and  LeGrand  Lockwood — Another  Bull-leader  J  Who 
is  it? 212 

CHAPTER  XIII. 

ANTHONY  W.  MORSE  AND  THE  CHANCELLORSVILLE  RISE. 

The  First  Game  of  "  Brag  "  in  the  Village  of  Hanover—"  The  Boy's 
the  Father  of  the  Man" — First  Appearance  of  Morse — Wall 
Street  Men's  Wives— Getting  Ready  for  a  Twist— The  Ursine 
Vocabulary — A  Vindictive  Bear  Going  Short  of  Pittsburg — Wait- 
ing for  News  from  the  Front — Chasing  a  Telegram — The  Hook- 
nosed Man  Nursing  the  Market — Sounding  the  Charge  along  the 
Whole  Line — The  Second  Game  of  "Brag" — Raking  in  the 
Profits— Si  13,500  in  My  Right  Boot-leg,  and  No  Money  to  Pay 
for  My  Dinner, 223 

CHAPTER  XIV. 

"WHAT  WILL  HE  DO  WITH  IT!" 

The  Life  of  an  Operator;  Excitement  and  Repose — In  Pursuit  of 
Happiness  Furiously — The  Terrestrial  Paradise  of  a  Money  Win- 
ner—The Delights  of  the  Eye  and  the  Pride  of  Life— Two  Com- 
rades in  Luck — "  Is  this  Happiness  ?  " — Birds  of  Passage  on  the 
Wing  to  Long  Branch — Wall  Street  at  the  Watering  Places — 
Dowagers,  Damsels  and  Dunderheads — Saratoga  the  "  Sweet 
Boon  "  to  the  Broker — The  Congress  and  Court  of  Vanderbilt,  and 
the  Other  Money  Kings— They  Spell  S-t-o-c-k-s,  and  then  They 
Buy  Them — A  Good  Resolution  in  Danger  of  Being  Broken — 
Operating  by  Telegraph — "  Once  More  Upon  the  Waters,  yet 
Once  More  and  the  Slocks  Bound  Beneath  us  like  a  Steed  that 
Knows  its  Rider" — Grasp  the  Substance  ere  the  Shadow  Fade,  .  238 

CHAPTER  XV. 

WHAT  BECAME  OF  IT— HENRY  KEEP  AND  OLD  SOUTHERN. 

Our  Financial  Oracle  Gives  us  General  Views  on  Stocks— News  of 
Panic  in  the  Woods — The  Nightmare  Ride  in  Sleeping-Cars — I  j 

Learn  my  Fate— The  History  of  the  Mystery— The  P Pool  in 

Erie— Cornering  Uncle  Daniel  with  S300,000— A.  G.  Jerome 
Playing  with  Old  Southern,  and  Working  the  Bears — The  Final 


:  CONTENTS. 

PAGl. 

Grip — A  Grey-eyed  Man  Reading  a  Telegram  at  Saratoga,  "  Come 
on  to  New  York  Without  Delay,  the  Fruit  is  Ripe  " — Henry  Keep, 
His  Antecedents,  Character  and  Operations — A  Pauper's  Son  Dies 
Worth  $4,000,000— The  Plot— "Money  Tightens,  and  the  Trap 
is  Sprung  " — Jerome  Laid  Out  Cold — A  Meditated  Scolding  Ter- 
minates in  a  Dinner  at  Delmonico's — What  Came  of  the  Dinner— 
A  Flyer  in  Harlem— The  Last  Resort— Almost  Cleaned  Out— An 
Operation  in  Seven-thirties — I  Play  my  Last  Card ;  Is  it  a  Trump?  .  248 


CHAPTER  XVI. 

OPENING  THE  BALL  ON  ROCK  ISLAND. 

Bulls,  Bears  and  Changelings — How  Bears  Make  Stocks  Go  Up — 
Dull  Seasons,  Rises  and  Panics — Dark  Times  for  Bulls — A  Rocket 
Shoots  Up  in  the  Darkness — More  about  A.  W.  Morse — How  He 
Came  to  be  a  Broker— The  Rock  Island  Pool  Taking  in  the  Shorts 
— Under-currents — The  Financial  Outlook;  Is  it  to  be  Up  or 
Down  with  Stocks? — Loans  and  Taxation  vs.  Fresh  Currency — 
Two  Bears  Try  to  Cover  their  Shorts  but  Can't — A  Tantalizing 
Stock— The  Story  of  My  Five  Hundred  Shares— A  Bone-boiler's 
Opinion  about  Rock  Island — "Boiling  Down  the  Gristle  of  the 
Bears  "—The  Final  Twist— A  Big  Profit,  and  a  Smile  all  Round,  .  269 


CHAPTER  XVII. 

THE  GREAT  RISE  OF  1864. 

A  Drop  in  the  Market,  in  Consequence  whereof  I  Seek  for  Advice 
and  Sympathy  from  a  Broker— Tricks  of  Wall  Street  Trade— He 
"  Can't  Stand  the  Press  " — Forming  Cliques  and  Pools — The  Bull- 
leader  Tries  to  Break  the  Market— Bulling  Erie  and  Catching  Uncle 
Daniel  in  the  same  old  Trap — Morse  on  the  Warpath — A  Quartette 
of  Operators  Plan  a  Campaign — Getting  into  Pools  and  Collecting 
Information — The  Press  Puts  the  Fact  Before  the  People— The 
Countrymen  in  Wall  Street — Scenes  on  'Change — Our  Little  Ex- 
cursion "  Up  in  a  Balloon,  Boys  " — Hauling  in  the  Profits — Flyers 
in  General,  and  Our  Flyers  in  Particular — The  Canton  Pool — 

Visiting   Our'  Property   in  East  Baltimore — E Makes  an 

Address  to  the  Committee  on  Canton  Stock,     .    .  .284 


CONTENTS.  XI 

CHAPTER  XYIH. 

BUBBLE  COMPANIES. 

PAGX. 

Ripples,  Oscillations  and  Tide  Waves  in  Speculation— New  Enter- 
prises on  the  Crest  of  the  Wave — Wall  Street  Men  Become  Miners 
and  Mineralogists — Mining-patter  and  Wealth  Going  a  Begging — 
How  They  Blow  the  Bubbles — "  A  Limited  Number  of  Shares  " 
Offered  to  the  Public— The  Bubble  Full  Blown;  it  Glitters  Like  the 
Rainbow — Ropers-in  Pulling  in  Victims — The  Corpulent  Gentle- 
man in  Gold-bowed  Spectacles — What's  in  a  Name  ? — Very  Much 
in  the  Case  of  a  Mining  Company — We  Go  In  on  the  "  Hard-pan  " 
Basis — Chasing  Bubbles  Through  the  Market — We  Catch  Them 
Without  Difficulty — Fighting  for  Subscriptions — "  Gregory  Consol- 
idated," and  "  Gunnell  Gold  "  Books  Open— A  General  Bursting,  .  298 

CHAPTER  XIX. 

PANIC— FALL  OF  A.  W.  MORSE— CLEARING  AWAY  THE 
WRECK. 

Going  In  for  Just  One  More  Operation — Standing  on  the  Apex  of  a 
Fortune— The  Bull-leader  in  His  Glory— Helping  the  Unlucky 
Ones— Daniel  Drew  Selling  Erie— A  Constitutional  Bull— The 
Last  Spirt  in  Stocks — Signs  and  Auguries  of  the  Disaster — Morse 
Trying  to  Sell  Fort  Wayne — Planning  the  Last  Stroke — The 
Market  Trembles,  Totters  and  Falls— Panic  All  Day  and  All 
Night — The  Evening  Exchange  Pandemonium — "  'Tis  Done ;  but 
Yesterday  a  King,  and  Now  He  is  a  Nameless  Thing,  so  Abject 
yet  Alive  "—Morse  After  His  Ruin— The  Last  Scene  of  all  that 
"  Strange  Eventful  Story  " — The  Fortunes  of  The  Quartette — Meet-  . 
ing  a  Prophet  of  Evil — A  Black  Sunday  and  a  Blue  Monday — 
Bubble  Company  Stocks  at  a  Discount, 313 

CHAPTER  XX. 

MARGINS,  POOLS,   CORNERS,  POINTS,  AND  OF  HOW 
BROKERS  MAKE  THEIR  MONEY. 

Philosophy  of  Rises  and  Panics  in  Wall  Street — Margins  Before 
and  Since  1862. — Effect  of  Doing  Business  on  Margins — Different 
Kinds  of  Pools— Percentages  Paid  by  Bears  for  the  Privilege  of 
Selling  Stocks — Do  Pools  Pay? — Instances  of  Unsuccessful  or  Sue- 


li  CONTENTS. 

FAGS. 

cessful  Pools—  Why  They  are  Generally  Unsuccessful—  Trying  to 
Unload  Upon  the  Shoulders  of  the  Outsiders—  Points  !  What  are 
They  ?  —  Engineering  a  Short  Interest  —  How  Brokers  Make  Money 
in  Pools  —  The  Time  to  Buy,  and  the  Time  to  Sell  Stocks  —  They 
Sell  or  Buy  in  the  Stocks  of  their  Customers—  The  Percentage 
Paid  for  Carrying  and  Turning  Stocks—  Jolly  Old  Boys  Keeping 
Their  Dimes  Busy,  .................  326 


CHAPTER  XXI. 

THE  SECOND  HAKLEM  CORNER. 

More  Figuring  on  Balances  —  Gathering  Up  the  Fragments  —  A  Flyer 
on  Five  Hundred  Fort  Wayne  for  Cash—  What  Can  I  Sell  Short? 
One  Solitary  Column  Standing  Erect  Among  a  Heap  of  Ruins  — 
The  Commodore  Holds  up  Harlem  and  Waits  for  His  Revenge  — 
"  Sell  Harlem  at  1  90,  and  Now  You're  Right  "  —  History  and  Causes 
of  the  Second  Harlem  Rise—  The  Plot  to  Break  Harlem—  The 
Counterplot—  The  Stock  on  the  Rampage—  The  Biters  Bit—  The 
Greatest  of  All  the  Bears  in  the  Trap—  Daniel  Drew  Selling  Calls 

—  A  Lobby-engineer  with  a  Broken  Wing  —  Bears  Dancing  on  Red- 
hot  Plates—  The  Commodore  says,  "Put  Up  the  Price  to  One 
Thousand  "  —  The  Coup  de  Grace  to  All  the  Bears  —  How  I  Came 
Out  on  Selling  Harlem  Short—  A  Cotton  Operation,     .....  343 

CHAPTER  XXII. 

IN  SEARCH  OF  A  BROKER—  THE  GOLD-BURST  UPWARDS 
—DULL  TIMES. 

The  Three  Brokers  ;  a  Vulture,  a  Sparrow,  and  a  Jolly  Boy  —  Bro- 
kers' Safes  are  Like  the  Lion's  Den  —  Lunching  in  the  Office  of 
N  -  &  Co.—  We  Find  What  We  are  Looking  For,  and  Put  Our 
Margins  in  the  Lunch  Room—  A  Jag  of  $50,000  Gold  and  What 
Came  of  It  —  Beautiful  June  and  Halcyon  Days  for  the  Quartette 

—  A  Financial  Dissertation  at  an  Inn  on  the  Road  —  The  Military 
Outlook—  Grant's  Hand  on  the  Throat  of  the  Rebellion—  Congres- 
sional Folly  and  Its  Consequences  —  The  Gold  Bill  —  We  Take  a 
Trip  to  Rockaway—  Telegraphing  in  Cipher—  Wherein  of  a  Tele- 
graphic Puzzle  —  The  Gold  Burst  —  A  Mistake  Which  Gave  Me  a 
Profit  of  $85,000—  Buying  50  Gold  Instead  of  Selling  50,     ...  358 


CONTENTS  xiii 

CHAPTER  XXIII. 

DULL  TIMES— AVEEAGING  ON  "POINTS." 

PAGl. 

A  Retrospect  of  the  Situation— An  Army  Without  Leaders— De- 
scription of  a  Dull  Market — "  Playing  With  Stocks  "  to  the  Tune 
of  $22,000— Buying  on  "  Points  "—A  Disagreeable  Looking  Mil- 
lionaire—A Wall  Street  Pointer;  His  Picture,  Antecedents  and 
Mystery — His  Geese  Always  Lay  Golden  Eggs — We  Buy  Five 
Hundred  Cumberland  Joint  Account  on  a  "  Point " — Averaging  a 
Loss — How  Men  Save  Themselves  by  Averaging — Advice  Given 
to  an  Operator  in  a  Tight  Place — "  Cumberland  not  Worth  Ten 
Cents  on  the  Dollar,"  and  I  am  Long  of  it  at  80— A  Bad  Show  for 
a  Profit — Keep  up  Your  Averaging,  My  Dear  Boy, 374 

CHAPTER  XXIV. 

THE  BREAK  IN  GOLD— PANIC-BIRDS. 

The  Gold  Fire-balloon — Vibrations  from  the  Cannon's  Roar— The 
Gathering  of  the  Clans  in  the  Gold-room — Desperate  Speculators 

at  the  Front— Portraits  of  Operators— N Bulls  Gold,  and  We 

Bull  It — A  Loss,  First  on  the  Long  and  then  on  the  Short  Side— 
A  Call  for  More  Margin,  and  an  Examination  of  our  Bubble- 
company  Assets — A  Visit  to  the  Den  of  the  Bloated  Spider— The 
Clergyman  and  Farmer  Looking  After  Their  Investment — They 
Find  the  House  "  Swept  and  Garnished  " — We  Meet  the  "  Corpu- 
lent Gentleman"  in  a  Picture  Gallery — The  Interview  and  ita 
Result — The  Fall  of  Atlanta,  and  Gold  on  the  Rampage  Down- 
wards—Panic-Birds at  Their  Feast — A  Portrait  of  the  "  Stormy 
Petrels  " — Buy  Cumberland — I  "  Average  "  out  of  My  Loss,  .  .  386 

CHAPTER  XXY. 

PIGS  OF  GOLD  IN  A  CORNER. 

The  Rise  in  New  Mess -The  Pork  Trade— Its  Magnitude  and  Seat— 
A  Village  Built  of  Hogs — The  Movements  of  the  Article — Corner- 
ing the  Packed  Pigs — I  Make  $10,000  in  Cotton  and  then  Slip  into 
Pork  Barrels — An  Evening  Lecture  on  Provisions,  etc.,  at  the  Fifth 
Avenue  Hotel— The  Pork  Corner  of  July,  1864— Who  Made  It?— 
My  First  Visit  to  the  Corn  Exchange,  and  What  I  Saw  There— A 
Crowd  of  Porkists— The  Retired  Pirate  Buvs  a  Thousand  Barrels 


XIV  CONTENTS. 

PAOl- 

at  47— Panic  on  the  Produce  Exchange— I  Sell  a  Call,  Buy  a  Call, 
and  Make  $59,000  on  One,  and  Lose  $6,000  on  the  Other— Mul- 
tiplying $500  by  $100, 398 

CHAPTER  XXVI. 

THE  WORSHIPERS  OF  THE  GOLDEN  CALF. 

The  Old  Fogies  Go  In— The  Cavern  of  the  Gold  Brigands— Fresh 
Levies  From  the  Country — Margins  on  the  Wing  to  Their  Nests 
in  the  Gold  Room— The  Bulls  and  Bears  Marshal  Their  Forces  for 
Another  Engagement — The  Bears  Under  the  Yoke— Gold  Once 
More  on  the  Rampage— What  Became  of  Our  Quartette— I  Sell 
"  One  Hoondret  Tousand  on  a  Dree  per  Shent.  Marchin  " — The  Old 
Rat  Nibbles  at  a  Cheese— My  Pile — A  Jew  Broker  Extracts  Many 
Shekels  from  a  Gentile— The  History  of  my  Friend  L —  —The 
Gold  Carnival  at  its  Height — Dancing  in  the  Gold  Room — A 
Riotous  Market  at  the  Fifth  Avenue  Hotel — A  Message  from  the 

Death-bed  of  L The  Last  Scene  in  the  Career  of  a  Great 

Speculator, 41] 

CHAPTER  XXVII. 

ASTRAND  AND  AFLOAT  AGAIN. 

The  Gap  Closes  Up,  and  the  Column  Moves  on  as  Before — Loss  on 
Loss— Tobin  Comes  to  the  Front— Fifty  Millions  of  Gold  Sold— 

E Makes  a  Little  Mistake— A  Dinner  at  Delmonico's— A 

Philharmonic  Concert — Lengthened  "  Sweetness  Long  Drawn  Out " 
— Golden  Dreams — A  Slight  Misunderstanding  Cleared  Up  in  a 
Very  Disagreeable  Manner — $45,000  Loss  by  a  Slip  of  the  Pen — 
Sunlight  Again— The  Bears  Putting  In  Their  Sickles  to  Reap  a 
Harvest— Who  Went  Short  of  Gold  ?— A  Bold  Stroke  for  Fortune 

—On  the  Rack  Once  More— E and  Myself  Stand  Guard  Over 

$2,000,000— A  Speculator's  Dream— The  Fatal  Order  Given  and 
we  are  Astrand — The  Final  Break-up— Floating  Away  on  a  Pot 
of  Money, 25 

CHAPTER  XXVIII. 

DREW  PLAYS  ON  HIS  ONE-STRINGED  LYRE— ERIE. 

Uncle  Daniel  in  Clover— His  Views  Respecting  «  Them  Erye  Sheers  " 
He  Plays  on  His  Musical  Instrument,  Erie— Buy !  Oh,  Buy !  Sell! 


CONTENTS.  XV 

Oh,  Sell !— He  Pays  Off  Some  of  His  Old  Harlem  Scores— He  "* 
Slides  Down  HU1  with  no  Erie  in  His  Hand,  Then  Picks  Up  Erie 

and  Travels  Up  Hill — D and  S Form  a  Partnership — 

Setting  and  Baiting  Traps  for  Shorts — Springing  the  Traps  and 
Bagging  the  Game — The  Old  Man  Soliloquizes— My  Fortunes 

During  the  Erie  Rise — A  "  Point "  and  Advice  from  R ,  the 

Railroad  Director — The  Trick  My  Broker  Played  on  Me — The 
Final  Twist— A  Big  Gold  Trade— The  Ketehum  Forgeries  and 
Their  Effect  on  the  Stock  Market— The  First  Move  for  Another 
Corner, 438 

CHAPTER  XXIX. 

FEMALE  SPECULATORS. 

Do  Women  Speculate  ?— Why  Not  ?— Speculation  Not  Unsuited  to 
the  Female  Character — A  Question  Answered — Ladies  on 
'Change,  and  Young  Misses  Receiving  Billet  Doux  from  Their 
Brokers,  and  Dreamjng  of  Stocks — A  Feminine  Pool  in  Harlem — 
Notable  Instances  of  Female  Speculators— The  Fortunes  of  Miss 

M ,  a  She-bear,  in  the  Stock  Market— The  Gold  Rise  of  1866— 

Why  a  Panic  in  London  Makes  Gold  Go  Up— Women  Who  Keep 
Accounts  in  Their  Own  Names,  and  Women  who  Do  Not — How 
Brokers  Carry  Their  Fair  Burdens — Beauty  a  Woman's  Margin — 
Influence  of  Women  upon  Stock-panics, 449 

CHAPTER  XXX. 

THE  FORTUNES  OF  A  COUNTRYMAN. 

A  Scene  in  a  Broker's  Office— B 1  Has  the  Petroleum  Fever- 
Blowing  Bubbles  in  Oil — A  Masterpiece  of  the  Engraver's  Art — 
Ravages  of  the  Petroleum  Epidemic — The  Mining  Board  and  How 
They  Make  Corners  There— The  Bubble  Breaks,  and  the  "  Lobster" 

is  Busted— We  Take  a  Nervine— B 1  Buys  a  Call  in  "  Prairie 

Dog  " — H.  G.  Stimpson  and  Billy  Marston  Carry  the  Bears  Up  in 
a  Balloon— Prairie  du  Chien  in  the  Clouds — What  Came  Out  of 

B t's  Call— $20,000  Made  from  $200  in  Forty-eight  Hours— 

"  Calls  and  Puts "  on  the  Brain— Henry  Keep  Nursing  His  Pet 
Stock — "  Buying  In  Under  the  Rule  " — Uncle  Daniel  says  "  We 
Must  Ingine  'em  " — The  Story  of  Pacific  Mail— L.  W.  Jerome  ( 

Unloading  His  One  Hundred  Thousand  Shares — B t's  Luck  in 

Pacific  Mail — He  Takes  a  Flyer  in  Atlantic  Mail  and  then  Buys 
One  Hundred  Erie  of  White  for  Cash, 461 


Xvi  CONTENTS. 

CHAPTER  XXXI. 

WOODWARD,  FISK,  JR.,  GOULD. 

The  New  Race  of  Financiers— W.  S.  Woodward— His  Portrait, 
Character  and  Fortunes— The  Ulysses  of  the  Stock  Market— His 
Wealth— James  Fisk,  Jr.— A  Theatrical  Character— His  History 
and  Antecedents — His  First  Appearance  in  the  Street— A  Funny 
Man— Anecdotes— Scenes  in  His  Life— Jay  Gould's  Portrait— Erie 
Under  the  Care  of  Drew — The  Marston  Pool— Uncle  Daniel  Cor- 
nered—He Makes  Terms  and  Revenges  Himself  on  the  Cornerers 
—New  Chapters  of  Erie— The  Market  Crowded  with  Losers- 
Drew  and  Vanderbilt  Take  all  Their  Money — An  Original  Opinion 
Respecting  Vanderbilt  and  Drew — Drew  Throws  Dirt — Fortunes 
of  M , 478 

CHAPTER  XXXII. 

THE  BATTLE  OF  THE  GIANTS. 

Vanderbilt  Obtains  Control  of  Central  and  Erie— Drew  to  be  Left 
Out  in  the  Cold — The  Commodore  Warms  a  Viper — Drew  at  His 
Old  Games — The  Opening  of  the  Battle — Injunction  and  Counter- 
Injunction— The  Plot  Thickens— Ten  Millions  of  Fresh  Erie 
Saddled  Upon  the  Commodore— Will  He  Break  ?— Stampede  of 
the  Conspirators — Thunder  All  Around — New  York  Central 
Hoisted  into  the  Rain  Clouds,  and  Why— A  Compromise— The 
"  Old  Man  "  Weak  in  the  Knees — A  Treaty  of  Peace,  its  Terms, 
etc. — New  Developments — Locking  Up  Greenbacks,  and  Punish- 
ing Drew, 494 

CHAPTER  XXXIII. 

THE  GREAT  GOLD  CONSPIRACY  OF  1869. 

How  Gold  was  Put  Up  and  Down  since  1865— Gold  Looks  Down- 
wards in  1869,  and  Why — Jay  Gould  Organizes  a  Scheme — 
Amount  of  Gold  to  be  Handled — The  Complicity  of  Government 
Sought  to  be  Obtained — Influences  Brought  to  Bear — The  Leaders 
of  the  Conspiracy — Everybody  Selling  Gold  Short — The  Vast 
Sums  Bought  by  the  Clique— Jay  Gould  on  the  Rack — Fisk 
Comes  to  the  Front — A  New  Programme — The  Conspiracy  Draws 
to  a  Head — Dawning  of  Black  Friday — Strategy  Adopted — Act- 
resses Gazing  on  the  Drama— The  Battle  in  the  Gold-room— Rout 
of  the  Conspirators— Speyers  Bidding  Up  Gold— The  Bears 
Triumph— Scenes  in  Broad  Street— The  Stock  Panic,  .  .  .  .512 


CONTENTS. 
CHAPTER  XXXIV. 

AFTER  THE  STORM. 

PAGK. 

The  Wrecks  of  the  Market — Folios  of  Litigation — Fisk  and  Gould  at 
Bay — Erie  Castle  Besieged — Settling  up — How  the  Conspirators 
Extricated  Themselves  from  their  Position — A  Bluff  Game  and  a 
Sharp  Game — Woodward  comes  to  the  Front— History  of  his  Ope- 
rations in  Reading  and  Rock  Island — His  Downfall,  Never  to  Rise 
Again — The  Franco-Prussian  Gold  Rise  and  Break— How  the 
Germans  Outwitted  the  Yankees 525 

CHAPTER  XXXY. 

THE  GREAT  RINGS  OF  1871  AND  1872. 

The  Alliance  between  Politicians  and  Financiers — How  Rings  are 
formed — The  Bank  and  Treasury  ring — The  Pennsylvania  Central 
monopoly — The  Vanderbilt  combination  — The  Fisk-Jay  Gould 
ring — Antecedents  and  character  of  Jay  Gould — Operations  of 
the  Erie  ring— Position  of  Vanderbilt  in  1868  and  1873— His 
lieutenants,  Horace  F  Clark  and  Augustus  Schell — Other  railroad 
cliques — The  strength  of  the  great  rings  in  1873 534 

CHAPTER  XXXVI. 

HENRY  N.  SMITH  AND  ALDEN  B.  STOCKWELL,  AND  THEIR 
OPERATIONS. 

Henry  N.  Smith,  his  Personal  Appearance  and  Character— The 
Chicago  Fire  Panic  and  the  Rise  of  '71— A  $3,000,000  Profit— Con- 
nection of  Smith  and  Gould — The  Hannibal  and  St.  Joseph  Pool — 
The  Erie  coup  d'  etat — Effect  of  the  Assassination  of  Fisk  and  the 
Expose  of  the  Tammany  Ring— How  Drew  phlebotomized  Smith 
and  Gould— Alden  B.  Stockwell  and  his  Antecedents— Sewing  up 
Pacific  Mail  in  a  bag — Collision  of  Smith  and  Gould  with  Stock- 
well— The  quarrel  between  Gould  and  Smith— The  Gould-Stock- 
well  party 544 

CHAPTER  XXXVII. 

THE  NORTHWESTERN  CORNER— THE  SHYLOCK  ERA  AND  THE 

FALL  OF  STOCKWELL. 

The  Three  Leaders  of  the  Northwest  Movement,  Gould,  Clarke,  and 
Schell— Arranging  Preliminaries— Averting  a  Threatened  Danger 
—Entrapping  Drew  and  Smith— Writhing  in  the  Trap— A  Desper- 
ate Measure — The  Arrest  of  Gould— Jumping  the  Price  100  per 
cent,  in  an  Hour — Losses  of  Drew  and  Smith— A  Gigantic  Opera- 
2 


XVlii  CONTENTS. 

tion  in  Erie— How  Gould  made  $4,000,000— Yanderbilt  and  Gould 
"Watching  the  Market— The  Shylock  Abroad— Selling  Money— 
Stockwell  in  a  Tight  Place — A  Crash  in  Pacific  Mail,  and  Stock- 
well  "  Goes  up," 553 

CHAPTER  XXXVIII. 

GOULD  VERSUS  VANDERBILT— THE  SHADOW  OF  PANIC 
The  Bear  Leader  and  the  Bull  Leader  Face  to  Face — The  Vanderbilt 
Railway  Programme— His  Lieutenants  and  Brokers — The  position 
of  Jay  Gould — His  Agents  in  the  Street — Arguments  in  favor  of  a 
probable  Depreciation  of  Stocks — Watering  Railway  Stocks— A 
Sum  in  Arithmetic  —Why  the  Money  Market  was  easy  in  the 
Summer  of  1873 — The  Government  Syndicate — Too  many  new 
Railways— The  Pacific  Mail  Movement— The  Great  Gold  Pool— 
The  deepening  Distrust  of  Capitalists. — The  Gold  Break — A  gath- 
ering storm 565 

CHAPTER  XXXIX. 
THE  GREAT  PANIC  OF  1873. 

Jay  Gould  Tilts  His  Golden  Hammer — An  Auriferous  Avalanche — 
Failure  of  Kenyon,  Cox  &  Co.,  and  Daniel  Drew — "  Too  Much 
New  Rail-road" — The  Panic  Mongers  at  Work — Suspension  of 
Jay  Cooke  &  Co. — Account  of  the  Operations  of  the  Firm— Effect 
of  the  Failure — Prices  "  drop "  like  Lead  in  a  Vaccuum — Spirit 
of  Panic  Rampant— Scenes  at  the  Fifth  Avenue  Hotel— Another 
Black  Friday — Failure  of  Fiske  &  Hatch,  and  Twenty  Other 
Firms — Collapse  of  the  Trust  Companies — Closing  of  the  Stock 
Exchange — Consultation  Between  President  Grant  and  the  Capi- 
talists— Vanderbilt  Under  the  Harrow — Jay  Gould's  Position — 
Just  Missing  Another  85,000,000 575 

CHAPTER    XL. 

THE  GREAT  PANIC  OF  1873— CONTINUED. 
The  Hammer  Ringing  on  the  Anvil — Failure  of  Henry  Clews  &  Co., 
and  of  Howes  &  Macy — Re-opening  of  the  Stock  Exchange — 
Grand  Rally  along  the  whole  line  under  Command  of  Vanderbilt — 
G.  B.  Grinnell  &  Co.  go  down — Renewal  of  the  Panic— Blocking 
the  Wheels  of  Speculation— The  Basis  of  the  Lake  Sliore  Pool- 
Using  the  Bonds  of  the  Company— The  House  of  the  Spragues 
falls— Prostration  of  the  Stock  Market,  and  General  Paralysis  of 
Mercantile  Business— Financial  Condition  of  Europe— The  Panic 
in  London— Doing  Business  on  Margins— Estimate  of  the  Shrink- 
age of  Values— The  Financial  Overlook  for  1874.  .  .  590 


Inside  Life  in  "Wall  Street 


CHAPTER  I. 
WALL  STREET. 

Popular  Ideas  of  Wall  Street — The  Memories  it  Awakens — Its  Annals— 
The  Centre  of  Speculation — The  Money  Forces — Riches  with  Wings 
— Different  Classes  of  Speculators — Bulls  and  Bears — The  "Long" 
and  "Short"  of  it — Pools,  Rings  and  Cliques — How  they  are 
Formed — Bears  in  a  "  Corner  " — The  Kings  and  Satraps  of  the  Mar- 
ket—"Puts  and  Calls,"  what  are  they?— The  Ghosts  of  the  Street 
— A  Speculator's  Life — The  Close  of  a  Misspent  Career. 

APITAL  flows  into  reservoirs  as  naturally  as 
rivers  flow  into  the  ocean.  These  reservoirs 
are  in  the  great  commercial  cities.  Venice 
had  its  Rialto,  where  of  old,  high  rates  of  usance  were 
taken,  and  ducats  passed  briskly  from  hand  to  hand ; 
London  has  its  Lombard  Street;  Boston  has  its  State 
Street,  and  New  York  has  its  Wall  Street.  This  last 
is  something  more  than  a  thoroughfare  lined  with 
buildings,  along  which  men  and  vehicles  pass  and 
repass.  It  is  an  idea  or  rather  a  bundle  of  ideas 
which  take  various  shapes  more  or  less  definite  in 
the  minds  of  men  when  they  hear  the  name  sounded. 
To  the  merchant  and  banker  it  is  a  financial  cen- 
tre, collecting  and  distributing  money,  regulating 


20  INSIDE    LIFE   IN   WALL    STEEET. 

the  exchanges  of  a  continent  and  striking  balances 
of  trade  with  London  and  Frankfort.  To  the  out- 
side observer  and  novice  it  is  a  kind  of  work-shop 
thronged  by  cunning  artisans  who  work  in  precious 
metals,  where  vessels  of  gold  and  vessels  of  silver 
are  wrought  or  made  to  shine  with  fresh  lustre,  and 
where  old  china  is  fire-gilt  as  good  as  new.  The 
moralist  and  philosopher  look  upon  it  as  a  gambling- 
den, — a  cage  of  unclean  birds,  an  abomination  where 
men  drive  a  horrible  trade,  fattening  and  battening 
on  the  substance  of  their  friends  and  neighbors, — or 
perhaps  as  a  kind  of  modern  coliseum  where  gladia- 
torial combats  are  joined,  and  bulls,  bears  and  other 
ferocious  beasts  gore  and  tear  each  other  for  the  public 
amusement.  The  brokers  regard  it  as  a  place  of 
business  where,  in  mercantile  parlance,  they  may  ply 
a  legitimate  trade,  buying  and  selling  for  others  on 
commission.  To  the  speculators  it  is  a  caravansera 
where  they  may  load  or  unload  their  camels  and 
drive  them  away  betimes  to  some  pleasant  oasis.  To 
the  financial  commanders  it  is  an  arsenal  in  which 
their  arms  and  chariots  are  stored,  the  stronghold  to 
be  defended  or  besieged,  the  field  for  strategy,  battles 
and  plunder.  All  these  ideas  and  a  multitude  of 
others,  more  or  less  true,  rise  up  at  the  mention  of 
Wall  Street. 

It  has  its  memories,  too.  Bright  as  it  is  with  glass 
and  gilding,  and  festooned  with  column,  capital  and 
cornice  of  granite,  freestone  and  marble,  clean  cut 
and  fresh  as  of  yesterday,  still  it  has  a  color  of  gray 
antiquity.  More  than  two  centuries  of  years  have 
come  and  gone  and  "changed  the  blood  and  made  the 
frame"  of  seven  generations  of  Aryan  men  who  have 


THE   ANTIQUARIAN   IN"   WALL   STREET.  21 

trod  this  street.  It  dates  back,  the  antiquarians 
tell  us,  to  the  year  1653,  for  its  first  survey  was  in 
the  palmy  days  of  Petrus  Stuyvesant  when  Sehouts 
Burgomasters  and  Schepens  lorded  it  over  the  little 
colony  of  New  Amsterdam.  Its  name  (one  of  the 
few  remaining  landmarks  of  the  early  Dutch  posses- 
sion,) was  derived  from  the  wall  or  tingle  built  of 
palisades  and  earth  on  the  northern  line  of  the  street 
to  ward  off  the  aborigines,  and  also  possibly  the  ag- 
gressive Yankee  from  the  east.  This  fortified  wall 
extended  on  the  northerly  side  of  the  street,  from 
Broadway  to  Pearl  Street,  which  was  then  washed  by 
the  tides  of  Oost  or  East  River.  It  had  its  dry  ditches, 
and  its  embrasures ;  its  lower  end  was  terminated  by 
a  half  circular  redoubt,  and  through  its  land-gate  on 
Broadway,  and  its  water-gate  by  the  river,  herds  of 
cattle  were  driven  every  night  from  the  woods  and 
pastures  to  the  north,  in  which  we  are  informed  by 
the  same  veracious  antiquarians,  bears  and  other  wild 
beasts  abounded.  On  this  same  street,  when  the  Salt- 
mountain  or  some  other  broad-beamed  ship  came  in 
from  the  Scheldt — the  Holland  merchants  drove  a 
lively  trade  with  the  red  man,  bartering  beads  and 
cloth  of  Leyden  for  peltries  of  the  beaver  and  otter. 
But  what  contrasts  has  the  light  of  two  hundred 
years  painted  between  the  mimic  life  of  New  Amster- 
dam and  this  great  roaring,  serious,  tragic  Babylon  of 
to-day.  No  sign  now  of  the  quaint,  peaked  roofs 
covered  with  Dutch  tiles,  the  fort  flying  the  blue  lions 
of  Holland,  the  old  stockade  and  half  moon  embank- 
ment at  its  lower  end.  No  trace  now  of  the  sturdy 
Netherland  soldier  with  pike  or  musquetoon.  But 
the  ancient  name  of  Wall  Street  still  remains.  That 


22  INSIDE    LIFE  IN   WALL    STREET. 

name  is  something  more  than  a  shadow,  too,  for  it 
is  in  fact  Wall  Street,  still  lined  with  a  succession 
of  fortresses,  behind  whose  bastions  are  garrisons  well 
disciplined  and  alert,  guarding  the  treasures,  if  not 
the  lives  of  a  nation.  Within  its  casemates  and 
vaults  lie  piles  of  coin,  enough  to  excite  the  cupidity 
of  ten  West  India  companies,  or  to  lade  a  hundred 
Spanish  galleons.  Here  the  forces  of  commerce 
silently  gather  and  equip  themselves  for  distant  ex- 
peditions, from  which  they  return  again  with  the 
spoils  of  "  Ormus  and  of  Ind."  In  these  strongholds 
terms  are  dictated  to  the  vanquished,  and  treaties 
made.  Here  in  niches,  and  on  many  a  buttress  and 
"coigne  of  vantage,"  the  fledglings  of  finance  make 
"their  pendent  bed  and  procreant  cradle."  Tower- 
ing over  all  stands  old  Trinity,  like  a  giant  sentry, 
day  and  night,  clashing  out  in  peals  and  chimes  of 
bells  from  his  watch-tower,  "all's  well." 

Speaking  financially,  the  annals  of  Wall  Street  are 
brief;  but  brief  though  they  be,  they  are  crowded 
with  forms  and  faces,  full  of  notable  incidents  and 
varied  with  all  the  lights  and  shadows  that  flare  and 
disappear  in  the  passing  careers  of  a  thousand  eager 
money-getters.  As  through  one  camera,  they  concen- 
trate 'a  picture  of  the  material  progress  of  the  nation 
towards  wealth,  its  daring  enterprises,  its  steady  in- 
dustries, its  wild  speculations,  its  sharp  commercial 
crises,  and  all  the  myriad  transformations  of  financial 
life.  Of  its  story  early  in  the  present  century,  only 
faint  echoes  come  back  to  us.  The  names  of  the  old 
merchants  who  went  down  to  the  sea  in  ships,  and 
of  the  money  changers  and  high  treasurers  who,  in 
those  days,  were  wont  to  come  into  the  street  to 


CAMPAIGNS    OF   SPECULATION.  23 

draw  from  or  deposit  in  the  United  States  Bank,  the 
Manhattan  Company,  or  Bank  of  New  York,  to  in- 
quire for  the  quotations  or  exchange  views  on  the 
state  of  the  market,  are  almost  forgotten,  but  mov- 
ing about  among  these  phantom  groups,  we  recog- 
nize the  stateliest  figure  of  all — that  of  Alexander 
Hamilton.  Then  we  see  new  banks  set  up  and  oper- 
ations slowly  widening  through  the  terms  of  five 
Presidents. 

But  it  is  only  within  the  past  thirty-five  years  that 
Wall  Street  has  got  to  have  a  special  significance  as 
the  centre,  not  only  of  money  but  of  speculation. 
From  1835  to  1870  a  series  of  great  inflations  and 
correspondent  depressions  occurring  there  furnish  the 
most  protracted,  singular  and  striking  chapter  in  the 
annals  of  finance. 

The  history  of  nations  is  a  history  of  wars  of  con- 
quest. The  temple  of  Janus  in  old  Rome  was  shut 
but  twice  in  a  thousand  years.  The  history  of 
finance  is  a  history  of  the  rise  and  fall  of  values,  in 
other  words,  of  speculations  and  panics.  Wall  Street 
is  our  temple  of  Janus.  The  lust  of  money  is  as 
strong  as  the  lust  of  dominion,  and  avarice,  like  its 
nobler  brother,  ambition,  "scorns  delights  and  lives 
laborious  days." 

Other  analogies  exist  between  wars  and  specula- 
tion. Campaigns  are  planned,  and  strategy  dis- 
played on  '  change  as  well  as  on  the  tented  field. 
Wall  Street  has  its  plots  and  counterplots,  its  dashing 
assaults,  and  stout  defences.  He  who  enters  that 
arena  must  be  armed  cap-a-pie,  and  cunning  in  all 
the  tricks  of  fence.  The  bank  account  of  the  stock 
operator  is  his  martello  tower,  to  be  defended  against 


24  INSIDE    LIFE   IN   WALL    STREET. 

all  kind  of  attacks,  secret  as  well  as  open,  mine,  storm- 
ing and  escalade.  He  must  look  well  to  his  out-works, 
man  his  parapet  by  day  and  night  for  the  besiegers 
will  surely  press  him  hard.  His  bank  account  must 
furnish  him  also  with  weapons  of  offense  and  defense, 
for  money  is  the  sinews  of  speculation  as  well  as  of 
war. 

The  strength  of  Wall  Street  then  may  be  said  to 
lie  in  a  figure  three  with  eight  ciphers  after  it,  for 
this  is  the  money  balance  of  the  banks  and  other  de- 
positories. Three  hundred  million  dollars. 

That  massive  pile  of  light  freestone,  with  fluted 
doric  columns,  abutting  on  three  streets  and  over- 
looking the  Broad  Street  arena  where  the  strong  and 
nimble  athletes  of  the  Stock  Exchange  exercise  their 
muscles  and  air  their  lungs,  that  is  the  Sub-Treasury 
so  famous  in  the  story  of  American  Finance.  It  is 
the  fly-wheel  in  the  engine  of  trade  accumulating  and 
regulating  the  money  forces.  Its  vaults  hold  ninety 
millions  of  specie  and  a  sum  in  currency  varying  at 
different  times  from  ten  to  thirty  millions.  Within 
rifle  shot  of  this  building  are  five-sixths  of  the  bank- 
ing institutions  of  New  York  City,  whose  daily  de- 
posits rise  in  flush  times  to  one  hundred  and  ninety 
millions.  But  these  latter  are  overshadowed  and 
dominated  by  the  Sub-Treasury,  the  monster  de- 
pository on  which  only  the  treasurer  of  the  nation  is 
permitted  to  draw.  Through  its  gates,  streams  flow 
in  and  out,  to  deepen  and  broaden  the  river  of  com- 
merce, or  heighten  the  torrent  of  speculation. 

In  noting  the  prominent  features  of  Wall  Street,  it 
will  be  remarked  how  strongly  the  idea  of  negotiability 
is  there  brought  out.  All  the  principal  values  of 


THE    WIXGS    OF   KICHES.^  25 

commerce  are  in  this  mart  represented  by  so  many 
paper  certificates.  The  goods  and  credit  of  the  mer- 
chant are  represented  by  promissory  notes,  which  are 
bought  and  sold,  and  pass  from  hand  to  hand,  almost 
like  bank-bills.  Cotton,  pork,  grain,  sugar,  tobacco, 
and  a  thousand  other  bulky  and  gross  products  are 
represented  under  the  form  of  warehouse  certificates. 
The  wealth  of  banks,  of  railway  corporations,  and  of 
many  other  stock  companies,  are  floating  about  under 
the  guise  of  certificates,  and  to  the  very  gold  in  the 
vaults  of  the  Treasury,  wings  are  given,  and  coin 
and  bullion  fly  in  notes  of  yellow  and  green. 

What  is  the  easiest  mode  of  exchange  and  barter? 
this  is  the  first  inquiry  in  the  operations  of  trade,  and 
Wall  Street  has  answered  it.  Those  diaphanous  slips 
of  paper  representing  untold  riches,  pass  from  hand 
to  hand,  as  fast  as  words  can  utter  their  value. 
The  money  lender  can  count  his  millions  on  a  table 
three  feet  square,  or  inclose  them  in  a  bank-box 
not  much  larger  than  a  family  Bible  or  a  Webster's 
Unabridged. 

It  is  difficult  to  conceive  of  Wall  Street  values 
apart  from  the  idea  of  their  negotiability.  Will  a 
piece  of  property  pass  current  at  a  market  price  ?  will 
it  be  transferred  with  little  trouble  ?  then  is  it  a  suita- 
ble object  of  purchase  and  sale. 

The  ease  and  swiftness  with  which  securities  change 
owners  produce,  of  course,  a  vast  volume  of  business, 
and  profits  or  losses  are  duplicated  with  corresponding 
swiftness  and  ease. 

Money  and  values  represented  on  paper,  are  the 
passive  forces;  men  who  buy  and  sell  or  "operate," 
are  the  active  forces  of  trade. 


26  INSIDE   LIFE  IN   WALL    STREET. 

What  constitutes  a  State  ?  inquires  the  poet : 

"Not  high  raised  battlement  or  labored  mouud, 
Thick  wall  or  moated  gate  *  *  *  * 
No!     Men."*** 

So  we  might  inquire  what  constitutes  a  street? — cer- 
tainly "Wall  Street — not  the  granite  pavements  nor 
the  long  piles  of  masonry  covering  stores  of  uncounted 
wealth,  but  the  men  who  throng  this  thoroughfare 
and  keep  the  machinery  of  commerce  and  speculation 
in  motion. 

Wall  Street,  viewed  as  an  aggregation  of  trading 
humanity,  may  be  divided  into  two  great  classes. 
First,  the  speculators,  or  as  they  are  pleased  to  term 
themselves,  operators,  who  buy  or  sell  stocks  at  their 
own  risk  of  loss  or  expectation  of  profit.  Second, 
the  brokers,  who  buy  and  sell  for  others  in  considera- 
tion of  a  fixed  commission.  All  those  who  deal  in 
the  street,  may  be  said  to  belong  to  the  first  class; 
for  there  is  hardly  one  of  the  brokers  who  does  not 
speculate,  directly  or  indirectly,  but  there  are  many 
of  the  speculators  who,  themselves,  never  buy  or  sell, 
but  employ  the  brokers  to  do  it  for  them.  A  broker 
is  almost  necessarily  a  speculator,  but  a  speculator  is 
not  necessarily  a  broker.  We  shall  at  present  de- 
scribe only  the  speculators,  reserving  the  brokers  for 
a  separate  chapter. 

A  speculator  is  called  a  "bull"  or  a  "bear,"  accord- 
ing to  his  interest  in  the  market.  A  bull  buys  stock 
for  a  rise,  and  the  term  may  be  derived  from  his  like- 
ness to  the  animal  of  the  bovine  genus  who  tosses 
upwards  with  his  horns.  He  is  said  to  be  "  long  "  of 
stocks,  because  he  is  presumed  to  always  hold  his 
stock  ready  for  their  delivery  on  sale. 


THE  SPECULATOR  A  BULL  OR  BEAR.       27 

A  "bear"  is  one  who  sells  stocks  for  future  de- 
livery, which  he  does  not  own  at  the  time  of  sale.  In 
other  words,  he  contracts  to  deliver  stocks  at  a  fixed 
price  and  within  a  fixed  time.  If  stocks  should  fall 
during  the  continuance  of  the  contract,  he  buys  them 
in  the  market  at  the  reduced  prices,  and  delivers 
them  to  the  party  to  whom  he  agreed  to  sell  them 
at  the  contract  price.  The  difference  between  the  two 
prices  is  his  profit.  To  illustrate  this  operation,  sup- 
pose A  agree  to  sell  to  B  one  hundred  shares  of  New 
York  Central  at  180,  deliverable  at  any  time  at  the 
option  of  A,  within  thirty  days,  A  not  having  the  one 
hundred  shares  at  the  time  the  contract  is  made.  If 
the  price  of  the  stock  falls  to  170,  A  buys  it  at  that 
price  in  the  open  market,  and  delivers  it  to  B,  who 
pays  him  180,  the  contract  price,  at  &  profit  to  A  of 
10  per  cent,  on  the  shares,  i.  e.,  $1,000.  But  if  the 
price  rises  to  190,  and  A  is  obliged  to  complete  his 
contract,  he  buys  it  at  that  figure  and  delivers  it  to 
B,  who  pays  him  180,  entailing  in  this  manner  a  loss 
of  $1,000  on  A. 

The  name  "bear"  is  said  to  have  been  first  given, 
at  the  time  of  the  South  Sea  Bubble,  to  such  persons 
as  were  operating  to  depress  stocks,  because  they 
were  acting  the  part  of  a  man  who  would  kill  a  bear 
for  the  sake  of  his  skin.  As  a  bull  is  said  to  be 
"long"  of  stocks,  so  a  bear  is  said  to  be  "short"  of 
stocks,  just  as  a  person  who  has  no  money  is  said  to 
be  "short  of  funds."  The  bear  has  no  stock  when 
he  offers  to  sell,  but  merely  contracts  to  deliver  what 
he  does  not  possess,  and  is  of  course  interested  in  de- 
pressing the  market  so  that  he  may  fill  his  contracts 
at  lower  prices,  just  as  the  bull  is  interested  in  raising 


28  INSIDE    LIFE  IN   WALL    STREET. 

stocks,  so  that  he  may  profit  by  the  increased  market 
value  of  the  stocks  which  he  holds. 

Two  forces,  it  should  be  noted,  are  all  the  while 
acting  in  the  commercial  world  growing  out  of  a 
great  variety  of  causes  which  we  will  not  now  pause 
to  enumerate.  One  is  a  projectile  force,  sending 
values  upward;  the  other,  a  kind  of  financial  gravi- 
tation, carrying  values  downwards.  The  effect  of 
these  forces  respectively,  the  bulls  and  bears,  seek 
to  heighten  and  turn  to  their  o\yn  profit.  A  com- 
munity of  interest  begets  a  community  of  action,  and 
so  the  bulls  often  unite  to  raise  the  value  of  particular 
stocks,  and  form  thos'e  combinations  known  in  the 
"Street"  as  "cliques,"  "rings"  or  "pools," — terms 
nearly  synonymous, —  their  object  being  to  elevate 
the  price  of  stocks  by  owning  a  controlling  interest 
and  making  a  market  price  so  that  they  can  unload 
at  a  large  advance  on  the  price  at  which  they  bought. 

These  cliques,  rings  and  pools  in  stocks  answer  to 
the  combinations  which  are  termed  monopolies  in  the 
staple  articles  of  commerce,  such  as  grain,  rice,  sugar 
and  tobacco.  They  buy  up  the  floating  supply  and 
then  satisfy  the  demand  at  the  price  which  they 
choose  to  impose.  Suppose  A,  B  and  C  have  con- 
tracted to  deliver  five  thousand  shares  of  a  certain 
stock  which  they  do  not  hold,  and  D,  E  and  F  hold 
all  the  stock  in  question,  obviously,  A,  B  and  C  must, 
in  order  to  fulfill  their  contracts,  buy  the  five  thou- 
sand shares  of  D,  E  and  F  at  whatever  price  they 
choose  to  sell  it.  In  this  case  A,  B  and  C,  who  are 
"bears,""  are  "cornered"  by  D,  E  and  F,  who  make 
up,  we  will  suppose,  the  "bull  ring." 

A  ring  is  formed  thus :     When  money  is  easy,  and 


HOW   RINGS   ARE    ORGANIZED.  29 

the  financial  future  bright,  some  shrewd  operator 
casts  about  for  a  stock,  (generally  railway,)  which 
is  selling  at  a  fair,  or  still  better,  a  low  price  in  the 
market.  The  whole  amount  of  stock  issued  is,  we 
will  say,  fifty  thousand  shares  of  one  hundred  dollars 
each,  that  is,  five  million  dollars  at  par.  But  half  of 
this  amount  is  held  abroad  or  in  the  hands  of  in- 
vestors at  home,  and  will  not  therefore  be  likely  to 
come  on  the  market.  This  leaves  two  millions  and  a 
half,  or  twenty-five  thousand  shares  of  stock  floating 
about  the  market,  and  this  is  the  amount  which  must 
be  bought  by  the  proposed  ring  if  it  would  be  thor- 
oughly successful  in  its  results.  After  consultation 
with  some  other  noted  operator  or  operators,  the 
scheme  is  framed  and  a  paper  drawn  up  which  will 
read  something  like  this,  viz. : 

We,  the  subscribers,  in  consideration  of  our  mutual  promises,  hereby 
agree  to  buy  the  number  of  shares  of  stock  of  the Railroad  Com- 
pany set  opposite  to  our  names,  respectively.  That  we  authorize 
Martin  &  Son  to  buy  said  stock,  and  we  promise  to  pay  to  Mar- 
tin &  Son,  in  order  to  secure  them  against  loss  which  may  arise  in  car- 
rying said  stock,  ten  per  cent,  of  the  market  value  of  the  shares  which 
said  firm  are  to  buy  for  our  account  respectively,  and  they  are  authorized 
to  sell  and  re-purchase  the  same  to  the  best  of  their  judgment,  and  to 
receive  one  eighth  per  cent,  commission  on  all  purchases,  sales  and  re- 
purchases. We,  the  subscribers,  agreeing  to  use  our  best  efforts  to  aid 
in  raising  the  price  of  said  stock,  and  not  to  deal  therein  on  our  account, 
until  said  joint  account  is  closed  (or  we  are  to  be  at  liberty  to  deal  in 
said  stock  at  our  option). 

Signed                    MARTIN  &  SON,  5,000  shares. 

W.  S.  WOODWORTH,  5,000  shares. 

JAMES  STEWART,  5,000  shares. 

JOSEPH  MILLER,  5,000  shares. 

CHARLES  P.  CURRIER,  5,000  shares. 
&c.,  &c.,  &c. 


30  INSIDE    LIFE   IN   WALL   STREET. 

The  ring,  or,  as  it  is  sometimes  called,  the  party, 
having  been  made  up,  they  proceed  to  buy  the  stock. 
Two  pre-requisites  are  necessary  to  every  successful 
ring;  first,  secrecy,  second,  simulation.  The  buying 
of  the  stock  must  be  done  under  cover,  and  often 
occupies  several  months.  Every  possible  method  is 
taken  to  deceive  those  who  are  outside  the  ring,  and 
prevent  them  from  supposing  that  the  stock  is  pass- 
ing under"  the  control  of  the  party  who  are  manipu- 
lating it.  Sometimes  the  stock  is  made  to  assume  a 
weakness,  as  though  it  would  drop  several  per  cent., 
and  all  sorts  of  reports  are  set  afloat  to  depreciate  its 
value.  This  is  done  to  induce  sales.  As  it  slowly 
rises,  more  stock  is  brought  out  for  sale,  by  holders 
who  are  tempted  by  the  enhanced  price,  all  of  which 
is  quietly  bought  by  the  party  and  laid  away.  The 
bears  are  meanwhile  making  contracts  for  the  future 
delivery  of  the  stock  to  the  "  ring."  Some  of  these 
contracts  are  in  the  form  of  sellers'  options  for  thirty 
and  sixty  days,  during  which  period  the  bear  or  seller 
has  the  privilege  of  delivering  a  certain  amount  of 
stock  at  a  fixed  price.  But  most  of  these  "short 
contracts"  are  made  as  follows,  viz. :  A  sells  a  lot  of 
stock,  which  he  does  not  possess,  to  B,  and  borrows 
it  from  C,  for  delivery  to  B.  A  will  then  owe  the 
stock  to  C,  who  can  call  for  it  at  any  time,  and  A  is 
thus  "short"  of  the  stock  to  the  amount  which  he 
has  agreed  to  deliver.  The  ring  will  gladly  buy  the 
stock  of  the  bears,  and  loan  it  to  them  for  delivery, 
because  in  this  way  they  create  a  demand  for  the 
stock,  which  they  alone  can  supply.  It  will  be  readily 
seen  that  if  the  bears  have  contracted  to  deliver  a 
large  number  of  shares,  so  that  the  market  is  in  the 


TWISTING   THE   BEARS.  31 

condition  termed  "over  sold,"  a  firmness  is  created 
in  the  price,  owing  to  the  constant  demand  on  the 
part  of  the  bears,  for  stock  to  complete  their  con- 
tracts. 

This  state  of  affairs  is  heightened  as  the  ring  goes 
on  getting  a  firmer  grip  of  the  stock,  and  as  the  bears 
become  more  courageous  in  putting  out  their  con- 
tracts, owing  to  the  opportunities  for  making  money 
by  a  fall,  which  the  higher  price  of  the  stock  natu- 
rally suggests  to  them. 

Many  devices  are  resorted  to  by  the  ring  to  induce 
short  sales  by  the  bears.  The  stock  held  by  them  is 
offered  to  the  bears  as  a  loan  on  easy  terms,  and 
when  they  sell  the  borrowed  stock,  the  ring  buy  the 
very  stock  they  have  just  loaned.  When  the  stock 
price  has1  risen  from  20  to  40  per  cent,  it  suddenly 
grows  scarce.  The  bears  find  themselves  troubled 
to  make  their  deliveries.  Now  the  ring  prepare  to 
"  twist "  their  antagonists.  A  favorable  day  is  selected 
when  everything  looks  bright  and  sunny  in  the  finan- 
cial world,  a  plausible  report,  relative  to  the  prospects 
of  the  Railroad  Company,  whose  stock  is  under  the 
control  of  the  ring,  is  noised  abroad,  and  different 
brokers  are  employed  to  bid  up  the  price  in  the  mar- 
ket in  order  to  frighten  the  bears,  and  at  the  same 
time  they  are  notified  to  deliver  the  stock  which  they 
have  borrowed  of  the  ring.  Thus,  the  bears  are 
compelled  to  "cover,"  that  is,  to  close  their  contracts 
by  buying  and  delivering  the  stock,  which  the  ring 
alone  can  sell  them.  Sometimes,  instead  of  buying 
the  stock,  the  bears  "settle"  with  the  ring  by  paying 
them  the  difference  between  the  market  price  and  the 
lower  price,  at  which  they  contracted  to  deliver  it. 


32  INSIDE    LIFE  IN   WALL    STREET. 

In  that  case,  the  ring  find  themselves  saddled  with  a 
large  amount  of  stock,  for  which  there  is  little  de- 
mand. And  now  the  problem  is  to  unload.  Accord- 
ingly, they  sell  enough  stock  to  "break"  the  market 
4  or  5  per  cent,  downwards.  The  bears  rush  in  and 
sell  at  the  lowered  price.  When  the  ring  have  taken 
a  sufficient  number  of  their  contracts,  they  bid  the 
stock  up  again,  and  'compel  the  bears  again  to  cover. 
Every  time  the  stock  rises  sharply,  it  has  such  an  ap- 
pearance of  strength  on  the  rising  slide,  that  many 
of  the  outside  bulls  are  tempted  into  buying,  and 
then  sell  out  at  a  loss,  when  the  stock  declines. 
The  ring,  to  use  a  Wall  Street  phrase  in  this  way, 
"milk  the  street,"  taking  money  out  of  the  bears, 
who  sell  at  a  low  price,  and  out  of  the  bulls,  who 
buy  at  a  high  price.  This  game  is  played  for 
many  weeks,  and  sometimes  months,  until  the  ring 
have  disposed  of  their  stock,  and  can  reckon  their 
profits. 

The  culmination  in  the  operations  of  a  ring,  such 
as  we  have  been  describing,  is  technically  called  a 
"corner,"  because  the  bears  are  unable  to  deliver  the 
stock  they  owe,  and  are  so  said  to  be  driven  into  a 
"corner."  The  history  of  the  "street,"  for  the  past 
thirty-five  years,  is  one  constant  succession  of  these 
"cornei*s,"  in  which  great  fortunes  have  risen  and 
fallen,  like  the  waves  on  a  stormy  sea.  Among  the 
more  remarkable  of  these  corners,  may  be  mentioned 
that  in  Canton,  1834  and  1835,  when  it  sold  up,  from 
60,  its  par  value,  to  300;  that  in  Harlem,  in  1864, 
which  carried  the  price  to  285,  and  that  in  Prairie  du 
Chien,  in  1865,  which  sold  in  three  months,  from  40 
to  250. 


THE   ARMIES    OF    SPECULATION.  33 

Nearly  all  those  prodigious  oscillations  in  the  stock 
market,  which  have  startled  the  public  for  the  past 
seven  years,  have  been  due  to  the  influence  of  those 
powerful  combinations,  which  have  obtained  control 
of  certain  stocks,  and  made  them  dance  up  in  long 
erratic  jumps,  or  have  hurled  them  down  still  more 
swiftly  and  strangely.  Hardly  a  week  goes  by  with- 
out a  recurrence  of  these  singular  phenomena.  Some- 
times it  has  been  Pacific  Mail,  sometimes  Erie,  or  Old 
Southern,  or  Pittsburg,  or  Reading.  In  these  traps 
the  bears  are  continually  caught  by  the  same  devices, 
and  not  seldom  the  bulls  fall  into  the  very  pits  which 
they  dig  so  industriously  for  their  adversaries. 

The  army  of  speculators  who  form  their  battalions, 
and  charge  up  and  clown  the  field  of  the  stock  market, 
is  a  motley  crowd,  and  like  the  army  of  Xerxes,  in- 
cludes representatives  from  many  nations, — Ameri- 
cans from  all  sections  of  the  Republic,  Englishmen, 
Scotchmen,  Welshmen,  Irishmen,  Germans,  French- 
men, Spaniards,  Italians,  Russians,  Norwegians,  Danes, 
Hungarians,  Hebrews,  Greeks  and  Ethiopians,  masque- 
rading under  the  guise  of  bulls  and  bears,  swell  the 
host,  and  rush  together  in  hostile  combat. 

The  generations  of  professional  speculators  are 
short  to  a  proverb,  but  after  allowing  for  a  floating 
population  of  occasional  operators,  and  of  those  who 
make  or  lose  fortunes  and  then  disappear  from  the 
scene,  there  is  still  another  portion  which  is  a  con- 
stant quantity  in  the  estimate.  These  are  the  men 
whose  sole  business  is  stock  speculation.  When  they 
have  once  entered  the  street,  they  never  leave  it  ex- 
cept in  a  pine  box  or  a  rosewood  case,  according  to 
circumstances.  If  they  lose  money,  they  stay  ther 

3 


34  INSIDE    LIFE  IN  WALL   STREET. 

to  regain  it,  and  if  they  make  money,  they  stay  there 
to  make  more.  Constitutionally,  and  by  tempera- 
ment, they  are  speculators.  Hear  them  talk,  and 
you  would  suppose  they  lived  on  hope,  rather  than 
on  those  delicious  ragouts  and  choice  wines  which 
Delmonico,  or  Schedler,  or  some  of  the  other  famed 
restaurateurs  furnish  them.  Those  saddest  words  of 
tongue  or  pen,  "  it  might  have  been,"  enter  largely 
into  the  thoughts  and  conversation  of  the  thorough- 
bred speculator.  If  and  but  are  the  most  frequent  con- 
junctions in  his  vocabulary.  His  whole  life  is  a  series 
of  regrets,  and  strange  to  say,  these  regrets  are  more 
often  for  what  he  might  have  made,  but  did  not,  than 
for  what  he  has  actually  lost. 

According  to  the  proverb  of  the  race-course,  every- 
body on  the  turf  or  under  it,  is  equal,  and  the  same 
is  true  of  the  field  of  stock  speculation,  in  which  a 
common  interest  on  one  side  or  the  other,  seems,  for 
the  time  being,  to  level  all  social  distinctions.  All 
classes  and  grades  are  represented  here — rich  and 
poor,  gentle  and  simple,  learned  and  illiterate.  Not 
unfrequently  these  noisy  groups  contain  more  than 
one  white  cravat,  on  divines  who  have  left  their  lambs 
to  graze  at  large,  while  they,  the  shepherds,  wander 
among  a  herd  of  another  complexion,  clad  in  bull's 
or  bear's  clothing.  A  certain  harmony  reigns  among 
these  discordant  elements,  although  not  quite  equal 
to  that  which  prevails  in  the  happy  family  of  the 
menagerie,  in  which  lambs'  and  lions,  doves,  eagles 
and  monkeys,  dogs  and  cats,  dwell  together  in  peace 
and  amity.  The  bankrupt  elbows  the  millionaire,  and 
asks  of  him  the  price  of  Fort  Wayne,  and  the  mil- 
lionaire replies  with  the  utmost  suavity,  "  eighty-five, 


THE   MONET-KINGS.   .  35 

sir,  at  the  last  quotation;"  the  broken  operator  takes 
whiskey  "straight"  with  the  wealthy  capitalist,  and 
the  puritan  and  blackleg  exhange  a  sympathetic  smile, 
when  they  see  the  stocks  advancing  in  which  they 
are  interested. 

This  social  phenomenon  is  due  not  merely  to  the 
influence  of  a  common  interest,  and  a  common  hope 
of  gain,  but  to  a  common  apprehension  of  possible 
loss.  Dickens,  in  one  of  his  novels,  has  ludicrously 
described  how  polite  men  are  to  each  other  in  the 
presence  of  a  danger  which  all  feel,  but  the  fear  of 
which  none  express.  In  seasons  of  earthquake  and 
flood,  wolves  herd  amicably  with  sheep,  and  the  boa- 
constrictor  twines  his  scaly  length  harmlessly  beside 
the  plumpest  of  does. 

Besides,  amid  the  wonderful  metamorphoses  of  the 
stock  market,  it  behooves  all  to  be  courteous  to  their 
fellows,  for  the  Lazarus  who  picks  up  the  crumbs  that 
fall  from  the  rich  man's  table  to-day,  may  himself  dis- 
pense liberal  charities  to-morrow;  the  bankrupt  of 
yesterday  may,  in  the  circle  of  a  single  sun,  become 
a  power  on  change. 

Notwithstanding  this  apparent  leveling  of  the  so- 
cial conventionalities  in  the  domain  of  speculation, 
still  it  is  in  other  respects  no  republic,  for  it  has  its 
sovereigns  and  satraps,  who  often  hold  its  tribes  in 
captivity  and  subject  to  an  iron  yoke. 

Charles  Darwin,  the  English  naturalist,  in  his  great 
and  fascinating  work  on  the  "Origin  of  Species,"  ex- 
plains in  part,  the  existence  of  so  many  different  spe- 
cies in  the  animal  kingdom,  by  the  doctrine  of  what 
he  terms  Natural  Selection,  i.  e.,  the  weak  and  unfor- 
tunate becoming  extinct,  the  strong  and  favored  living 


36  INSIDE    LIFE  IN   WALL    STEEET. 

and  mating  with  their  peers,  and  in  this  way  particu- 
lar species  being  perpetuated.  There  is  always  this 
struggle  going  on  everywhere ;  and  among  men,  as 
among  animals,  weak  races  become  extinct,  and  the 
subjects  of  stronger  races.  In  the  battle  of  life,  it  is 
the  few  strong,  determined  and  favored  men  who  win 
the  prizes.  Pre-eminently  is  this  true  of  Wall  Street. 
Ever  since  1862,  when  began,  the  greatest  era  of 
speculation  the  world  has  ever  seen,  faces  have  been 
appearing  and  disappearing  there  as  in  a  whirling 
stereoscope;  but  in  all  those  shifting  groups,  certain 
massive  faces  are  always  seen — faces  graven  with 
the  wrinkles  of  a  purpose  that  never  failed  them. 
These  men  have  "clutched  the  golden  keys."  Their 
names  are  the  talismans  which  unveil  many  a  dark 
financial  secret,  unlock  vaults  of  untold  treasure,  and 
set  the  genii  of  panic  at  work.  The  w^orld  of  change 
pays  them  tribute,  not  of  applause  merely,  but  of 
hard  cash,  with  scarcely  a  murmur  of  rebellion  against 
their  sovereignty. 

In  the  present  decade  among  a  host  of  lesser  ope- 
rators, Cornelius  Vanderbilt  and  Jay  Gould  are  the 
central  Titanic  figures.  .  These  men  are  the  Nimrods, 
the  mighty  hunters  of  the  stock  market;  they  are 
the  large  pike  in  a  pond  peopled  by  a  smaller  scaly 
tribe.  They  are  the  holders  of  those  vast  blocks 
of  stock,  the  cubical  contents  whereof  can  be  meas- 
ured by  an  arithmetic  peculiar  to  themselves;  they 
are  the  makers  of  pools  large  enough  to  swal- 
low up  a  thousand  individual  fortunes.  Sooner  or 
later,  the  money  of  the  smaller  tribe  of  speculators 
finds  its  way  into  the  pockets  of  these  financial 
giants. 


DIFFERENT   CLASSES    OF   OPERATORS.  37 

Young  men!  ye  "wealthy  curled  darlings  of  our 
nation,"  who  are  about  to  "put  up  your  money  in 
the  street,"  let  me  whisper  a  word  in  your  ear.  Be- 
fore you  venture  on  this  perilous  step,  go  to  Cornele 
or  Jay  Gould,  and  make  them  a  free  gift  of  all  the 
money  you  are  willing  to  risk,  (for  into  their  strong 
boxes  it  will  come  at  last,)  and  thus  you  will  be  saved 
a  world  of  wrong  and  trouble,  entailed  by  that  mys- 
terious, protracted,  and  to  you,  painful  process,  which 
will  surely  end,  finally,  in  the  transfer  of  your  money 
into  the  strong  boxes  aforesaid. 

Next  after  these  high  princes  and  potentates,  comes 
another  grade  of  operators, — men  of  great  financial 
ability  and  resources,  hard-headed,  and  strong  of 
nerve.  Some  of  them  are  now,  or  have  been,  lieu" 
tenants  and  coadjutors  of  Vanderbilt  and  Gould. 
Among  these  may  be  mentioned  Richard  and  Augus- 
tus Schell,  John  M.  Tobin,  Horace  F.  Clark,  and  Dr. 
Shelton.  Some  have  become  known  through  their 
connection  with  the  rings  which  have  kept  Wall  Street 
in  a  ferment  for  the  past  ten  years.  Leonard  W« 
Jerome,  W.  S.  Woodward,  H.  G.  Stimpson,  James 
Fisk,  Jr.,  and  Daniel  Drew,  belong  to  this  class. 
Many  of  these  noted  organizers  of  rings  have  made 
war  on  the  sovereigns  of  the  market,  and  sacked 
some  of  their  fortresses,  in  return  for  which  they 
have  suffered  severe  punishment  at  the  hands  of 
their  liege  lords. 

The  number  of  smaller  operators,  who  do  business 
on  capitals  of  from  ten  to  fifty  thousand  dollars,  is 
legion,  and  as  for  those  who  take  "flyers"  in  one  or 
two  hundred  shares,  they  are  a  great  host  whom  no 
man  can  describe,  much  less  enumerate. 


38  INSIDE    LIFE  IN   WALL    STREET. 

Many  of  the  operators  of  small  means,  as  well  as 
the  wealthier  class,  drive  a  smart  trade  in  "puts" 
and  "calls."  These  are  contracts  giving  the  holder 
the  privilege,  in  consideration  of  a  trifling  sum, 
(rarely  over  one  per  cent,  on  the  market  value 
of  a  stock)  of  calling  on  the  contracting  party,  or 
delivering  to  him,  as  the  case  may  be,  a  certain 
amount  of  stock  within  a  fixed  time,  at  a  price 
above  the  then  market  value  in  a  "call,"  and  be- 
low it  in  a^"put." 

The  following  is  a  copy  of  a  "  call : " 


New  York,  February  1st,  1870. 

For  Value  Received,  the  Bearer  may  CALL  ON  ME  for 
T  One  Hundred  Shares  of  the  Preferred  Stock  of  the  Chicago 
'  and   North-Western   Railroad  Company,  at  91  per  cent., 
'  any  time  in  thirty  days  from  date.      The  bearer  is  entitled 
to  all  the  dividends  or  extra  dividends  declared  daring  the 

time. 

Signed,  DANIEL  DREW. 

Witness,          DANIEL  MORRELL. 


The  market  price  of  the  stock  at  the  date  of  the 
call  is,  we  will  suppose,  85.  Now  if  the  price  rises  to 
94  in  the  course  of  the  thirty  days  during  which  the 
"call"  runs,  the  bearer  can  sell  one  hundred  shares 
at  94,  i.  e.,  for  $9,400,  and  call  upon  Daniel  Drew  for 
one  hundred  shares  at  91,  i.  e.,  $9,100,  and  deliver  it 
to  the  party  to  whom  he  has  just  sold  the  same 
amount,  netting,  (after  deducting  the  one  hundred 
dollars  which  he  paid  for  the  privilege),  two  hundred 
dollars  by  this  operation. 


PUTS   AND   CALLS.  39 

The  following  is  a  copy  of  a  "put:" 


New  York,  February  1st,  1870. 

For  Value  Received,  the  Bearer  may  DELIVER  ME  One 
Hundred  Shares  of  the  Preferred  Stock  of  the  Chicago 
and  North-Western  Railroad  Company,  at  80  per  cent., 
any  time  in  thirty  days  from  date.  The  undersigned  is  en- 
titled to  all  the  dividends  or  extra  dividends  declared  during 

the  time. 

Signed,  DANIEL  DREW. 

Witness,         JAMES  BOYD. 


If  we  suppose  the  stock  falls  to  75  during  the  pen- 
dency of  the  "  put,"  the  bearer  makes  four  hundred 
dollars  net  out  of  this  operation. 

The  holder  of  a  call,  it  will  be  seen,  is  a  "bull," 
and  the  holder  of  a  put  is  a  "bear"  on  the  market. 
But  these  contracts  are  often  used,  like  so  much 
money,  to  buy  or  sell  stock,  thus,  viz. :  Daniel  Drew's 
call  being  considered  "as  good  as  wheat,"  it  may  be 
deposited  with  some  broker  as  security  for  a  "  short 
sale "  of  one  hundred  shares  of  Chicago  and  North- 
western at  91.  If  the  price  falls  to  80,  the  holder 
makes  ten  hundred  dollars,  less  the  brokerage.  If 
it  rises  to  95,  the  broker  is  secure  by  the  privilege  of 
calling  on  Daniel  Drew  for  a  hundred  shares  at  91, 
which  he  delivers  to  the  party  to  whom  the  short  sale 
was  made,  and  here  the  holder  loses  nothing,  though 
he  makes  nothing.  The  "  put,"  on  the  other  hand, 
is  used  as  security  to  buy  stocks,  in  this  manner,  viz. : 
if  the  stock  fall  to  80,  the  putting  price,  the  holder 
can  buy  one  hundred  shares  at  that  price,  through 


40  INSIDE    LIFE  IN  WALL   STREET. 

some  broker  who  is  fortified  against  loss  in  case  the 
price  falls,  by  having  the  privilege  of  delivering  the 
one  hundred  shares  he  buys,  to  Daniel  Drew,  at  80, 
while  if  the  price  rises  above  80,  he  can  sell  it  and 
take  for  the  holder  of  the  put,  a  profit  on  this  opera- 
tion. In  an  active  market,  the  holders  of  puts  and 
calls,  after  making  several  profits  in  the  way  we  have 
described,  are  sometimes  able  to  fall  back  on  the  ori- 
ginal contract  of  their  puts  or  calls,  and  close  them 
up  at  a  handsome  figure. 

Daniel  Drew  and  the  late  Henry  Keep  have  been 
active  dealers  in  this  kind  of  contract,  with  what  singu- 
lar effects  upon  the  market,  will  be  hereafter  described. 

No  one  who  has  entered  the  precincts  of  the  stock 
exchange,  will  have  failed  to  notice  certain  nonde- 
scripts, who  constantly  frequent  the  market.  They 
are  men  who  have  seen  better  days,  but  having  dropt 
their  money  in  the  street,  come  there  every  day  as 
if  they  hoped  to  find  it  in  the  same  place.  These 
characters  are  the  ghosts  of  the  market,  fixing  their 
lack-lustre  eyes  upon  it,  and  pointing  their  skinny 
fingers  at  it,  as  if  they  would  say  "  thou  hast  done 
this !  "  They  flit  about  the  door-ways,  and  haunt  the 
vestibules  of  the  exchange,  seedy  of  coat,  blacking- 
less  of  boot,  unkempt,  unwashed,  unshorn,  wearing 
on  their  worn  and  haggard  faces  a  smile  more  melan- 
choly than  tears.  They  "put  up"  never  a  penny, 
and  yet  they  are  perpetually  asking  the  prices  of 
stocks  which  they  never  buy  or  sell.  They  have 
their  life's  history — it  is  that  of  many  of  "  Les  Mis- 
erables," — stranger  than  fiction,  more  doleful  than  a 
funeral  dirge, — a  spring  time  of  hope,  health,  love, 
prosperity  and  the  amenities  of  social  life,  then  a 


THE   LIFE   OF   A   SPECULATOR.  41 

brief  season  of  wild,  reckless  speculation,  a  brief  rev- 
elry of  smoke,  splendor,  champagne — then  what? 
penury,  darkness,  despair! 

We  have  thus  far  only  indicated  a  few  of  the  differ- 
ent classes  which  make  up  the  genus  speculator.  It 
wrould  require  a  volume  to  describe,  in  detail,  the 
numerous  species,  the  strong  individuality  of  the  men 
who  compose  them,  the  fortunes  they  roll  up  from 
nothing,  or  fling  to  the  winds  in  a  day,  the  thousand 
shifts  to  which  they  resort,  to  earn  an  honest  or  dis- 
honest living,  and  the  tricks  they  play  which  so  often 
make  the  outsiders,  if  not  the  angels,  weep.  The 
stories  to  be  told  of  some  of  them  are  worthy  to  be 
embalmed  in  another  "thousand  and  one  nights," 
pointed  with  morals,  and  teaching  lessons,  while  they 
appeal  to  the  love  of  the  marvellous,  like  the  tales 
by  which  the  Princess  Scheherezade  held  the  ear  of 
the  Sultan,  and  redeemed  her  life  from  forfeit. 

It  is  a  popular  fallacy  that  pronounces  the  life  of 
the  Wall  Street  man,  as  anything  rather  than  labo- 
rious. They  say  he  dresses  in  purple  and  fine  linen, 
and  fares  sumptuously  every  day,  though,  like  the 
Solomon  lilies  of  Scripture,  he  toils  not,  neither  does 
he  spin.  Let  not  the  hard-working  lawyer,  the  bur- 
dened and  anxious  merchant,  or  the  hardy  sons  of 
manual  labor,  envy  the  gilded  speculator,  though  he 
recline  on  silken  couches,  and  dally  with  the  daintiest 
of  viands,  and  sip  wines  of  the  vintage  of  Waterloo, 
out  of  Bohemian  glass.  True,  to  the  casual  observer, 
his  life  seems  easy  enough.  He  produces  nothing,  he 
drives  no  plough,  plies  no  hammer,  sends  no  "  shuttle 
flashing  through  the  loom."  In  political  economy  he 
would  be  properly  classed  among  the  strictest  order 


42  INSIDE    LIFE  IN   WALL   STREET. 

of  consumers.  His  airy  existence  seems  to  be  passed 
in  chasing  the  flying  fractions  up  and  down  the  mar- 
ket, or  in  making  the  values  which  pass  through  his 
hands  perspire  golden  drops,  just  as  the  Jews  clip  and 
sweat  the  coin  they  handle.  And  yet  what  life  is 
more  trying  than  his?  Beneath  his  frontal  sinuses, 
amid  the  convolutions  of  his  brain,  a  silent,  invisible 
struggle  is  going  on,  which  if  put  into  bodily  shape, 
would  startle  the  beholder.  There  the  vulture  pas- 
sions are  at  work,  led  on  by  their  generals,  ambition 
and  avarice.  Pining  envy,  fear  of  an  evil  which 
always  impends,  rage  over  injuries  inflicted  by  others, 
or  by  his  own  weakness  and  incapacity,  jealousy  and 
hatred  of  successful  rivals,  all  hold  carnival  in  the 
space  of  an  hour,  and  are  kept  active  and  sleepless 
by  hope  which  quickens  them  with  her  enchanted 
wings.  Above  him  hovers,  day  and  night,  a  vast, 
dark,  formless  shape,  threatening  ruin  and  penury. 
This  is  the  spectre  of  panic.  One  day  he  is  lifted  to 
dizzy  heights,  the  next,  plunged  into  black  depths. 
He  is  hurried  through  dark  labyrinths  through  paths 
where  a  single  step  is  destruction.  He  climbs  on  the 
edge  of  a  sword  to  a  fool's  paradise,  where  he  tastes 
joys  brief  as  a  dream,  and  in  an  hour  is  abased  to 
the  earth  where  he  drinks  the  full  cup  of  humiliation 
and  want.  Meanwhile  nature  is  holding  out  strange 
signals  of  alarm.  His  lips  and  cheeks  blanch  without 
any  assignable  cause.  Blacksmiths'  sparks  flicker 
before  his  eyes.  His  blood  regurgitates  to  his  heart, 
which  seems  to  swell  to  the  size  of  a  bullock's,  and 
beats  on  his  ribs  like  a  trip-hammer.  Paralysis,  apo- 
plexy and  aneurism  are  watching  for  their  prey. 
Not  long  since,  a  great  man  of  the  "street"  lay 


THE   FORTUNES    OF   W .  43 

for  weeks  in  the  clutches  of  this  last  disease,  and  the 
muffled  door-bell  told  the  result  of  this  harrowing 
career  of  a  speculator.  When  he  died,  they  said  he 
left  four  millions.  But  he  had  paid  for  this  colossal 
fortune  with  a  life  worn  out  in  middle  age  by  the 
weary  burdens  and  sharp  vicissitudes  of  the  stock 
market. 

The  "  fierce  extremes  "  of  Wall  Street,  may  be  best 

illustrated  by  the  experience  of  W .     He  came 

into  the  market,  in  1862,  with  six  hundred  dollars, 
bought  gold  at  110,  and  sold  it  at  135;  bought  again 
three  times  as  much,  sold  it  for  160,  went  into  Erie 
at  39,  sold  it  for  80,  bought  Pacific  Mail  at  120,  sold 
it  for  165.  In  March,  1863,  he  had  $49,000  at  his 
bankers.  But  this  was  only  the  beginning.  Some- 
thing was  going  on,  in  Harlem,  so  he  bought  2,000 
Harlem;  Morse  was  at  work  at  Pittsburg,  so  he 
bought  2,000  Pittsburg;  Erie  was  feverishly  mov- 
ing towards  90,  he  bought  1,000  Erie.  Meanwhile, 
Hooker  was  moving  on  Chancellorsville,  and.  there 
was  silence  in  the  stock  market,  for  the  space  of  a 
day.  Now  the  news  came,  of  a  retrograde  movement, 
in  plain  English,  a  repulse.  The  army  was  this  side 
the  Rappahannock,  the  signal  was  given,  and  the  co- 
hort of  bulls  moved  on  their  enemy's  works.  Erie 
sold  up  to  110,  Pittsburg  105  and  Harlem  in  its  pro- 
portion. He  pocketed  $90,000  more  by  this  venture, 
and  in  March,  1864,  he  stood  $250,000  ahead  of  the 
market.  Then  for  a  short  space  he  had  a  charming 
life.  A  pair  of  spanking  bays,  tandem,  whirled  him 
to  the  Park  in  a  tall  Belrnont,  with  a  flunkey  in  liv- 
ery, on  the  back  seat  with  a  bug  on  his  hat.  Over 
his  morning  repast  floated  the  aromatic  steam  of 


44  INSIDE    LIFE  IN   WALL   STREET. 

Mocha,  and  the  flavors  of  exotic  fruits.  He  lunched 
off  partridge,  stuffed  with  truffles,  washed  down  by 
a  bottle  of  Chateau  d'Yqem  or  the  liquid  pellucid 
gold  of  the  vintage  of  Xeres,  and  his  dinner  was  nine 
courses  of  fish,  flesh  and  fowl  at  Delmonico's,  flanked 
by  the  most  toothsome  of  entremets,  and  wines  that 
would  make  a  Mussulman  foreswear  his  creed. 

But  soon  W suffered  a  change —  "a  sea 

change  into  something  (not)  rich  but  strange."  He 
had  a  friend  who  gave  him  a  few  "points"  on  Ga- 
lena, then  selling  for  142.  There  was  a  pool  in  it 
which  was  going  to  put  it  up  to  175;  it  was  actually 
worth  200;  there  was  an  extra  dividend  of  40  per 
cent,  to  be  declared;  William  B.  Ogden  was  in  the 
movement — these  were  the  points.  He  bought  6,000 
shares.  Then  he  bought  5,000  Pittsburg  at  133 
and  2,000  Fort  Wayne  at  144.  In  ten  days  he  lost 
$270,000.  This  was  in  the  great  panic  of  April, 
1864. 

We  met  W six  weeks  ago.  He  informed  us 

that  he  had  just  breakfasted  on  a  modest  plate  of 
hash  and  a  cup  of  something  called  coffee,  but  in 
which  the  strongest  imagination  could  not  detect  a 
drop  of  the  infusion  of  the  Arabian  berry.  His  coat 
was  foxey,  his  hat  had  a  suspicious  shine  and  he  was 
generally  run  down  at  the  heel.  Such  is  the  present 
condition  of  this  individual,  but  the  future  may  have 
great  things  in  store  for  him.  Let  us  hope  it  may. 

Gambling  in  stocks,  after  following  a  legitimate 
business,  is  like  quaffing  brandy  after  sipping  claret. 
When  once  a  man  has  fairly  committed  himself  to 
speculation,  his  imagination  soon  grows  to  lend  a  hid- 
eous fascination  to  the  objects  of  his  pursuit.  An 


A  WALL   STREET   MAN'S   FATE.  45  - 

evil  genius  seems  to  hold  possession  of  him.  He 
takes  no  note  of  tune,  save  as  an  interval  between 
his  gains  and  losses;  the  thrill  of  the  one  and  the 
pain  of  the  other,  grow  duller  as  the  years  wear  away, 
until  at  length  he  becomes  the  opium  eater  of  finance, 
living  in  a  world  peopled  by  phantoms  which  haunt 
his  waking  hours,  and  flit  through  his  dreams.  The 
unsubstantial  pageant  vanishes  as  the  alarm  bell  of 
his  ruin  peals  out,  and  he  awakes  to  the  desolation  of 
reality. 

How  few  of  these  men  retire  with  fortunes  approx- 
imate to  their  hopes,  let  the  chronicles  of  the  Stock 
Exchange  tell.  The  number  during  the  past  ten 
years,  might  be  almost  told  upon  the  digits.  The 
few  successful  ones,  are  continually  emerging  from 
the  intolerable  repose  of  their  retirement,  and  even 
in  their  dotage,  coming  back  to  the  scene  of  their 
old  intoxications  mumbling  old  wives'  tales  of  what 
they  might  have  done  thus  and  thus,  and  burning 
their  fingers  after  a  fashion,  as  ancient  as  Croesus. 

As  for  the  rabble  of  the  unsuccessful,  they  cling  to 
their  illusions,  till  want  or  decrepitude,  or  both,  drive 
them  into  obscurity,  to  ruminate  over  a  misspent  life, 
and  be  laid  finally  in  nameless  graves,  by  the  hand 
of  charity. 


CHAPTER  H. 
THE  STOCK  EXCHANGE  AND  GOLD  ROOM. 

The  Focus  of  Speculation — The  "  Long  Room "  on  a  Field  Day — Por- 
traits of  Operators  —  History  of  the  Board  of  Brokers — The  Public 
Board — Queer  Characters — Volume  of  Business — How  it  is  Done — 
Brokers'  Vocabulary— Margins,  Differences  and  Options — Machinery 
of  Business — A  Broker's  Buckler — The  Gold  Room  in  New  Street — 
Rise  of  the  Gold  Board— The  Firm  of  We,  Us  &  Co.— The  Gold 
Bank,  and  how  it  Clears  Gold,  and  Collects  Differences. 

[HE  tide  of  humanity  that  pours  down  Broad- 
way, is  dashed  against  the  bulwarks  of  Wall 
Street,  and  whirled  to  the  eastward,  between 
the  mighty  walls  of  granite  and  sandstone,  which  line 
that  renowned  thoroughfare.  Through  two  mouths, 
New  Street  and  Broad  Street,  it  is  sucked  into  that 
seething,  whirling,  roaring  maelstrom — the  stock-mar- 
ket. Speaking  in  the  language  of  the  common-place, 
these  two  streets  are  merely  avenues  in  the  lower  part 
of  the  city  for  the  passage  of  men  and  loaded  wains, 
and  for  the  transaction  of  business ;  but  these  streets 
also  form  the  environs  of  the  Stock  Exchange,  which, 
as  from  the  focus  of  a  gigantic  parabolic  reflector, 
throws  a  light,  more  or  less  lurid,  over  the  whole 
financial  community.  That  lofty  faQade  on  Broad 
Street,  builded  as  of  snowy  marble  of  Paros,  "  of 
kingliest  masonry,"  sinks  into  a  modest,  two-story 
brick  rear  on  New  Street,  emblematical  of  the  stately 


CELEBRITIES  OF  WALL  STREET. 


PALACE    OF    THE    STOCK-LORDS.  49 

fortunes  which  enter  that  stately  front,  and  issue 
diminished  from  that  diminished  rear. 

This  is  our  palace  of  Aladdin.  Here  may  be  found 
that  wonderful  lamp  which  gives  speedy  and  fabulous 
wealth  to  him  who  grasps  it.  Here  also  is  stabled 
that  remarkable  horse,  which,  on  being  mounted,  of- 
ten flies  away  and  leaves  its  rider  on  a  certain  deso- 
late island,  called  Ruin. 

The  edifice  is  built  to  defy  the  powers  of  the  air 
and  fire — massively,  of  stone,  iron,  brick  and  glass, 
with  thin  veneerings  of  wooden  floorings ;  its  ruins 
ages  hence  may  for  aught  we  know  be  among  those 
which  the  coming  New  Zealander  may  gaze  upon  as 
he  sits  on  a  mound  of  dust  which  was  once  old  Trin- 
ity and  moralizes  on  the  fall  of  nations. 

A  dull  sound  like  the  murmur  of  distant  waters 
greets  the  ear  as  we  stand  before  it.  Let  us  enter 
between  the  corinthian  columns  through  the  Broad 
street  door.  A  deep  hall  with  lofty  ceiling  supported 
by  fluted  iron  pillars,  covers  the  length  and  breadth 
of  the  ground  floor  in  the  form  of  a  letter  L. 
Through  the  apertures  in  the  thick  walls  in  front  and 
rear  and  through  opaque  plates  of  glass  from  above, 
streams  in  a  dim,  though  not  a  religious  •  light,  by 
which  we  can  hardly  recognize  the  faces  in  a  roaring 
screaming,  turbulent  crowd.  This  was  the  "  Long 
Room,"  so-called,  a  portion  of  which  is  now  occupied 
by  tiie  new  hall  where  the  members  of  the  Stock  Ex- 
change hold  their  regular  sessions.  Directly  in  front 
of  us,  as  we  enter,  is  a  heavy  railing  pierced  with  a 
gateway,  where  sits  the  Cerberus  of  this  Hades,  whose 
office  it  is  to  see  that  none  pass  inside  of  this  barrier 
except  the  members  of  the  Board  of  Brokers. 


50  INSIDE   LIFE   IN   WALL    STREET. 

Passing  inside  this  railing  we  find  ourselves  on  a 
marble-paved  floor  fifty  by  fifty,  beyond  which  rises 
an  elevated  platform,  seventy  by  fifty,  abutting  on  the 
west,  on  the  New  Street  side. 

This  platform  is  occupied  by  the  brokers  board, 
which  is  shut  off  from  the  entrance  hall  by  heavy 
black  walnut  doors,  and  is  capable  of  containing  fifteen 
hundred  men,  when  closely  packed.  Within  this  en- 
closure only  brokers  are  allowed.  But  in  the  spectators' 
gallery  a:e  many  whose  fortunes  are  at  stake,  and  who 
watch  the  market  with  anxious  interest. 

It  is  a  field  day  on  'Change.  Stocks  which  for 
weeks  have  been  slowly  rising,  are  now  jumping  up- 
wards ten  per  cent,  in  an  hour. 

The  Board  room  is  like  Bedlam  broke  loose.  It  is 
crowded  with  buyers  and  sellers,  brandishing  their 
arm?,  shrieking  with  every  variety  of  tone,  from  the 
booming  basso  to  the  shrill  tenor,  and  if  noise  and 
confusion  in  the  Stock  Exchange  was  liable  to  pro- 
duce financial  convulsions,  the  country,  seemingly,  was 
on  the  verge  of  most  appalling  disaster.  But  the 
confusion  soon  spent  itself. 

Wall  street  is  fully  represented  this  morning.  The 
great  Banking  and  Brokerage  firms  are  on  the  ground 
executing  their  orders  and  reaping  a  golden  harvest 
of  commissions.  .  Files  of  sharp-looking,  smug  fellows, 
are  rushing  in  and  out,  on  the  double-quick,  holding 
in  their  hands  pads  of  paper,  on  which  the  latest  quo- 
tations are  recorded ;  while  the  telegraph,  with  cease- 
less click,  is  flashing  the  prices  to  every  commercial 
city  in  the  Union.  The  speculators  both  inside  and 
outside  are  all  here.  The  cunning  artificers  of 
"rings"  and  diggers  of  "pools,"  are  moving  about 


PORTRAITS  OF  STOCK  LEADERS.          51 

among  the  crowd  watching  the  effect  of  their  schemes 
and  cheering  on  their  journeymen.  Here  is  the 
veteran  Drew,  the  silent  Shelton,  the  astute  Gould, 
and  the  gladiatorial  Morrissey  ;  Osborne  of  the  rolling 
eye,  Stimpson  of  the  fine  Roman  nose,  and  Dick 
Schell,  looking  like  a  jolly  punchinello,  are  all  here. 
The  benevolent  features  of  Henry  Keep,  and  the 
blonde  locks  of  the  unterrified  Fisk,  are  missing,  but 
the  jetty  beard  of  Gould  is  hard  by ;  as  for  the  "  Com- 
modore," he  has  a  heavy  hand  in  this  game  which 
he  is  playing  in  an  office  not  far  away,  through  the 
medium  of  wires. 

Nearly  all  the  outsiders  have  a  greater  or  lesser  in- 
terest in  the  course  of  the  market.  Some  of  them 
stand  by  the  railing  that  surrounds  the  pit,  others 
watch  the  battle  afar  off,  standing  between  the  en- 
trance rail  and  the  door.  These  outside  operators 
have  faces  strongly  marked  by  the  exciting  life  they 
lead.  Their  features  often  become  set  into  a  fixed 
expression  of  anxiety.  They  gaze  at  the  scale  of 
prices  with  an  apparent  apathy,  disturbed  by  the 
pain  of  loss  or  lighted  up  by  the  pleasure  of  gain 
only  for  an  instant.  Some  of  them  seem  to  wear  the 
waxen  mask  which  grows  on  the  faces  of  gamblers 
covering  every  emotion  and  rarely  dropped  except 
when  some  keener  pang  or  more  intense  thrill  startles 
Ihem  off  their  guard. 

The  combat  between  the  bulls  and  bears  com- 
mences with  light  skirmishing.  As  the  day  wears 
away,  the  solid  columns  move  against  each  other, 
under  a  fire  of  heavy  artillery.  The  bears  begin  to 
give  ground  and  their  banners  wander  in  disarray. 
Suddenly  a  deafening  hubbub  breaks  out  from  the 
4 


52  INSIDE    LIFE  IN  WALL  STREET. 

pit.  New  York  Central  has  risen  ten  per  cent,  in  as 
many  minutes.  Some  great  bear  is  buying  stock  to 
cover  his  contracts,  his  followers  rush  after  him  and 
the  whole  army  of  bears  are  soon  at  work  buying  in 
.or  settling  up.  The  bulls  have  won  the  day,  and 
after  counting  the  dead,  wounded  and  missing,  and 
reckoning  the  spoils  and  losses,  respectively,  the 
.armies  retreat  to  their  camps,  and  prepare  for  new 
-campaigns. 

The  association  known  as  the  New  York  Stock 
Exchange,  was  formed  early  in  the  present  century. 
It  germinated  sixty  years  ago,  in  a  little  clique  of 
stock  dealers  numbering  scarcely  a  round  dozen,  who 
were  wont  to  meet  under  a  sycamore  tree,  which 
stood  in  Wall  Street,  opposite  to  the  present  banking 
house  of  Brown,  Bros.  &  Co.,  and  job  off  small  lots  of 
governments  or  stock  in  the  Manhattan  Company,  and 
Bank  of  New  York.  In  1816,  a  permanent  organiza- 
tion existed,  consisting  of  twenty-eight  members. 
The  names  of  most  of  the  men  composing  this  co- 
terie linger  now  only  in  the  memory  of  the  old  New 
Yorkers,  or  are  written  on  the  "dull  cold  marble" 
which  records  in  the  conventional  phrase  of  olden 
times,  the  virtues  of  these  men  of  'change.  Two  of 
them,  G.  M.  Tracy  and  Warren  Lawton,  veterans  of  a 
hundred  campaigns  and  survivors  of  fifty  years  of  the 
sharp  vicissitudes  of  Wall  Street,  are,  or  lately  were, 
still  wearing  out  a  green  old  age. 

As  early  as  1837,  the  organization  had  grown  to  be 
a  power,  but  a  power  for  evil  rather  than  good,  since 
it  stimulated  in  the  community  a  thirst  for  speculation. 
In  that  year,  too,  fell  the  great  banking  and  broker- 
age firm  of  J.  L.  and  S.  Josephs,  agents  of  the 


RISE    OF    THE    STOCK   EXCHANGE.  53 

Rothschilds,  and  rated  at  $5,000,000,  involving  mul- 
titudes in  a  wide-spread  ruin.  The  successors  and 
assigns  of  the  twenty-eight  brokers  of  1816,  have, 
indeed,  fed  on  strong  food,  and  waxed  exceeding 
great.  They  number,  in  1870,  between  ten  and 
eleven  hundred,  and  own,  or  control  wealth  which 
is  counted  by  the  ten  million.  The  old  sycamore  has 
decayed,  and  fallen  beneath  the  storm,  and  they 
meet  no  longer  under  the  "greenwood  tree,"  though 
there  is  a  poetic  fitness  in  such  a  place  of  meeting 
for  the  taurine  and  ursine  herd ;  but  in  a  marble  tem- 
ple dedicated  to  Mammon,  the  God  of  riches,  the 
ponderous  iron  doors  whereof  turn  like  the  Miltonic 
gates  of  the  celestial  city  on  golden  hinges. 

They  have  been  always  noted  for  their  exclusive- 
ness  in  admitting  new  men,  three  black-balls  being 
sufficient  to  bar  out  any  applicant.  A  very  strong 
prejudice  for  a  long  time  existed  against  Jews,  and 
dealers  of  that  nationality  were  almost  always  promptly 
black-balled,  notwithstanding  some  of  them,  as  for 
example,  Seixas  Nathan  and  Bernard  Hart,  had  been 
prominent  in  forming  the  organization,  and  the  one 
last  named,  had  acted  as  secretary  down  to  1840. 

They  were  equally  remarkable  for  their  conserva- 
tive views  in  respect  to  moneyed  operations.  A  few 
rich,  grey  headed  old  fogies  frowned  down  the  more 
enterprising,  but  less  wealthy  "  Young  America"  ele- 
ment, which  went  in  for  bold,  dashing  moves,  cliques, 
corners,  and  the  like.  Hence  it  happened  that  an 
outsider,  who  had  distinguished  himself  by  some  bril- 
liant coup  in  finance,  often  found  the  doors  barred 
against  him,  when  he  wished  to  enter  the  legitimate 
circle  of  this  close  corporation,  partly,  perhaps,  from 


54  INSIDE    LIFE  IN   WALL    STREET. 

the  jealousy  awakened  by  a  skill  which  threatened 
to  surpass  the  trained  financiers  in  their  own  arena. 

Of  course  this  exclusiveness  produced  a  reaction 
among  the  speculative  public,  and  rival  organizations 
were  formed,  according  as  the  volume  of  business 
tempted  men  to  share  in  the  heavy  commissions 
earned  thereby.  Prior  to  1836,  a  new  board  was 
formed,  which,  after  maintaining  a  precarious  exist- 
ence for  a  few  years,  became  extinct.  In  1862,  the 
same  causes  led  to  the  formation  of  another  associa- 
tion, known  first  as  the  Public  Board,  and  afterwards 
as  the  Open  Board  of  Brokers.  Everything  was 
favorable  to  such  an  organization.  Uncle  Sam's 
presses  were  printing  greenbacks  by  the  million.  A 
large  proportion  of  our  mercantile  population  were 
thrown  out  of  business  by  the  depression  of  1861, 
and  ready  to  embark  in  anything  which  promised  the 
improvement  of  their  shattered  fortunes ;  the  ebbing 
and  flowing  tide  of  the  war  itself,  distorted  or  ex- 
aggerated by  manipulations  of  the  telegraph,  also 
multiplied  the  fluctuations;  these  were  mighty  con- 
ditions precedent  to  such  a  movement.  Accordingly, 
men  of  all  shades  and  classes  flocked  to  the  "coal- 
hole," as  the  subterranean  apartment  in  William  Street 
was  called,  where  this  Public  Board  first  held  its  ses- 
sions. Lawyers,  whose  tastes  were  speculative  rather 
than  litigious,  more  than  one  clergyman,  whose  pas- 
toral labors  were  unremunerative,  broken  down 
operators,  merchants  out  of  business,  clerks  out  of 
situations,  Jews,  "native,  and  to  the  manner  born," 
as  well  as  the  greenest  and  most  unsophisticated  par- 
ties from  the  rural  districts,  swelled  the  motley  throng. 

Most  of  these  men  had  some  capital,  more  or  less — 


THE    PUBLIC    BOAKD.  55 

principally  less.  Strange  stories  are  told  of  some  of 
them.  One  pawned  his  watch,  paid  his  hundred 
dollars  admission  dues,  and  had  fifty  cents  left  in  his 
pocket.  This  he  expended  in  a  sumptuous  lunch, 
and  a  gin  cock-tail,  on  the  strength  of  which,  he 
bought  ten  gold,  made  five  hundred  dollars  in  an 
hour,  and  closed  the  month  with  five  thousand  six 
hundred  and  fifty  dollars  profits.  Another  mortgaged 
his  poultry  stand  in  one  of  the  markets,  and  made,  in 
six  months,  seventy-five  thousand  on  Harlem. 

The  Old  Board  looked  with  great  disfavor  on  its 
young  rival;  a  bitter  contest  arose,  in  which,  the  former 
had  the  advantage  in  wealth  and  established  position, 
the  latter  in  fire,  energy  and  numbers.  The  New 
Board  offered  to  do  business  for  1-32  brokerage,  i,  e., 
three  dollars  and  twelve  cents  on  a  hundred  shares ; 
the  Old  Board  responded  by  lowering  their  commis- 
sion rates  from  one-quarter  per  cent,  to  one-eighth 
per  cent.,  and  passed  a  resolution  of  expulsion  against 
any  one  of  its  members  who  had  any  dealings  with 
any  member  of  the  former  organization. 

Meanwhile,  the  tide  of  speculation  kept  rising 
higher,  and  both  parties  had  all  the  business  they 
could  do.  The  denizens  of  the  street  will  recollect 
the  singular  phenomena  presented  by  this  locality  in 
1862  and  1863.  The  basements  of  William,  Wall 
and  Broad  Streets,  and  of  Exchange  Place,  seemed 
to  have  been  suddenly  penetrated  with  innumerable 
burrows,  inhabited  by  new  and  singular  animals — 
mostly  rodents — gnawing  at  the  vast  cheese  of  specu- 
lation. Among  these,  too,  were  the  "woodchucks" 
of  the  class,  sitting  in  their  holes,  and  anon  appear- 
ing, frisking  about,  picking  up  a  few  choice  bits  and 


56  INSIDE    LIFE  IX   WALL    STREET. 

disappearing  like  prairie  dogs  at  stated  intervals,  or 
upon  the  least  alarm.  Every  inch  of  space  was  oc- 
cupied. Queer  little  niches  in  walls  were  scooped 
out  or  enlarged,  so  as  to  admit  a  desk,  and  over  the 
door  in  flaming  characters  was  the  imposing  sign, 
Sloper  &  Co.,  or  Lunkhead  &  Bro.,  Bankers  and 
Brokers.  It  is  a  surprising  circumstance  how  many 
bankers  were,  just  at  this  tune,  suddenly  spawned  in 
the  most  gorgeous  panoply  from  the  head  of  our 
financial  Minerva.  Some  were  infant  prodigies,  hoys 
of  twenty  summers,  reared  in  that  sharpest  of  schools, 
a  broker's  office,  whose  financial  ideas  were  founded 
on  first  principles.  They  seemed  to  have  resolved 
society  into  its  original  elements,  and  gone  back  in 
their  notions  respecting  the  sacredness  of  other  men's 
property  to  what  ethnologists  call  the  stone  period, 
when  men  lived  in  caves,  and  appropriated  to  them- 
selves all  kinds  of  property,  irrespective  of  those 
rights  so  studiously  inculcated  by  Blackstone  and 
Kent.  They  had  heads  of  sixty,  rolling  the  coldest 
and  keenest  of  eyes,  on  shoulders  in  which  the  del- 
toid muscle  had  been  hardly  yet  developed.  Then, 
too,  there  were  in  more  ostentatious  offices,  glittering 
with  plate  glass,  and  garnished  with  the  most  ara- 
besque of  black  walnut  furniture,  the  Oily  Gammons 
of  a  more  mature  age,  versed  in  the  business  wiles 
begotten  of  twenty-five  years'  experience.  They 
offered  the  public  schemes  by  which  wealth  could  be 
amassed  in  the  simplest  of  possible  ways, — a  few 
hundred  or  thousand  dollars  subscribed  and  paid  down 
with  the  almost  impossible  contingency  of  future  as- 
sessments. But,  mysteriously  enough,  most  of  these 
schemes  were  founded  on  proper  franchises,  etc.. 


MISCELLANEOUS   ENTERPRISES.  57 

which  were  situated  hundreds  and  thousands  of  miles 
away.  On  Deadman's  Ledge,  near  No  Man's  Peak, 
in  Colorado,  were  claims  yielding  gold  sulphurets, 
which  assayed  two  thousand  dollars  to  the  ton.  Near 
I-Euchre  Lake,  in  Wisconsin,  were  ingots  of  virgin 
copper  to  be  had  for  the  asking.  And  the  bituminous 
coal,  at  an  easy  distance  from  tide-water,  knocked 
the  spots  out  of  Scotch  bog  and  cannel.  The  street 
was  fairly  flooded  (on  paper)  with  flowing  wells,  and 
all  these  schemes  were  backed  up  by  all  sorts  of  cer- 
tificates and  affidavits.  Swindling  and  imposition  put 
on  the  cloak  of  Religion.  Deacons  and  elders,  vestry- 
men and  church-wardens,  lent  their  names,  and  too 
often  shared  in  the  plunder. 

All  these  miscellaneous  enterprises  served  to  deepen 
and  give  new  volume  to  the  waves  that  bore  upon 
their  topmost  crest,  the  bark  which  carried  the  Pub- 
lic Board  and  its  fortunes.  At  the  close  of  January, 
1863,  it  found  itself  stronger  in  crew,  better  organized, 
with  plenty  of  shot  in  the  locker,  and  an  experience 
won  in  the  most  perilous  navigation  through  rough 
seas,  and  in  treacherous  squalls.  In  the  spring  of 
1863,  this  organization  transferred  its  sessions  from 
the  basement  at  No.  17  William  Street,  to  which  the 
plebeian  name  of  the  "coal-hole"  had  been  given,  and 
held  them  in  a  more  commodious  apartment  on  the 
first  floor  on  the  opposite  side  of  the  street.  In  1864, 
they  moved  into  their  new  hall,  at  No.  16  Broad 
Street,  and  were  known  thereafter  as  the  "Open 
Board  of  Brokers."  The  warfare  so  long  carried  on 
between  the  rival  Boards  was  gradually  discontinued, 
and  at  last,  in  the  spring  of  1869,  as  consolidation 
se  med  to  be  the  order  of  the  day,  the  two  bodies 


58  INSIDE    LIFE  IN   WALL   STREET. 

joined  forces,  and  united  under  the  name  of  the  New 
York  Stock  and  Exchange  Board,  which  meets  in  the 
building  already  described.  The  board  organized  some 
years  ago  for  the  purpose  of  buying  and  selling  Gov- 
ernment Bonds,  was  also,  at  the  same  time,  incorporated 
with  the  Stock  Board,  forming,  altogether,  a  monster 
association  of  men,  who  devote  their  lives,  and  their 
fortunes,  if  not  their  sacred  honor,  to  the  business  of 
buying  and  selling  stocks  and  bonds,  etc.,  etc. 

The  Board  of  Brokers  is  a  wheel  within  a  wheel, 
an  imperium  in  imperio — a  government  in  itself.  It 
makes  laws  and  regulations  which  bear  upon  its  mem- 
bers as  strongly  as  the  laws  of  the  land.  It  has  a 
presiding  officer  to  compel  order,  to  impose  fines  and 
to  announce  decisions  and  decrees ;  a  judiciary  in  the 
shape  of  an  arbitration  committee,  which  passes  upon 
disputes  involving  the  contracts  of  members  and  its 
adjudications  are  final.  It  has  a  code  in  its  consti- 
tution and  by-laws.  When  a  member  fails  to  pay  up 
he  is  expelled.  When  a  bull  or  bear  is  unable  to 
meet  his  contracts,  the  stock  which  he  fails  to  de- 
liver is  "bought  in"  or  "sold  out,"  at  the  Board, 
"under  the  rule"  which  so  provides,  and  the  differ- 
ence between  the  prices  at  which  it  is  "  bought  in " 
or  "  sold  out,"  and  the  contract  price,  is  the  measure 
of  damages  for  the  breach  of  contract.  This  expedi- 
ent, by  a  rapid  process,  dispenses  with  the  aid  of  the 
courts  of  law  where  causes  drag  their  slow  length 
along  through  weary  years,  in  defiance  of  the  Bill  of 
Rights,  which  declares,  that  every  man  shall  have 
justice  speedily  and  without  delay. 

The  room  where  this  trading  body-politic  hold  their 
regular  daily  sessions,  is  a  magnificent  hall,  which 


HALL  OF  THE  BOAED  OF  BROKERS.        59 

looks  out  on  New  Street.  It  is  a  lofty  apartment, 
seventy  by  sixty,  with  a  gallery  on  the  south  for  the 
convenience  of  visitors ;  the  north  side  is  occupied  by 
the  president's  rostrum  and  two  large  blackboards  for 
recording  the  prices  of  the  hour.  Its  walls  are  gor- 
geously frescoed  in  blue  and  orange  and  are  adorned 
by  the  portraits  of  two  men  who  made  themselves 
noted  in  the  annals  of  American  finance,  viz.,  Jacob 
Little  and  John  Ward.  The  morning  session  com- 
mences at  ten  and  a  half  o'clock  and  continues  till 
about  twelve;  the  afternoon  session  is  from  one  till 
three,  during  which  periods,  the  list  of  the  stocks  and 
bonds,  most  dealt  in,  are  called  off  by  a  sandy-haired, 
gentlemanly  looking  Vice-President,  with  stentorian 
voice,  and  prices  are  established  for  the  moment  by 
those  who  buy  and  sell  the  different  stocks  on  the 
call,  as  it  is  termed.  All  business  brought  before  the 
organization,  such  as  the  election  of  members,  settle- 
ment of  disputes,  etc.,  etc.,  is  transacted  at  these 
regular  sessions,  and  the  list  of  prices  made  is  pub- 
lished twice  a  day,  on  slips  of  paper,  for  the  use  of 
members  and  for  the  press  and  the  public  generally. 
Two  things  will  especially  strike  an  observer  on 
change :  first,  The  apparent  looseness  and  reckless- 
ness with  which  business  is  done  there.  Second,  The 
immense  volume  of  business  done.  These  facts  may 
be  explained  by  the  rapidity  necessitated  by  the 
shortness  of  business  hours  in  the  day,  and  by  the 
vast  range  of  speculation  through  the  securities  dealt 
in — securities  representing  an  aggregate  market  value 
of  nearly  $4,000,000,000,  and  including  Government, 
State  and  Municipal  bonds,  and  Railway,  Bank,  In- 
surance and  miscellaneous  stocks. 


60  INSIDE    LIFE  IN   WALL   STREET. 

It  would  seem  at  those  seasons  when  speculation  is 
rife,  as  if  every  one  had  a  larger  or  smaller  pecuniary 
interest  in  stocks.  Not  only  the  bankers,  brokers 
and  money-men,  who  are  constantly  in  the  circle, 
but  the  staid  merchant,  the  retired  capitalist,  the  trus- 
tee of  estates,  the  manufacturer,  mechanic,  farmer, 
miner,  the  student,  lawyer,  doctor  and  clergyman, 
are  drawn  into  the  vortex.  A  large  portion  of  these 
men  are  not  seen  in  Wall  Street,  but  are  "  operating" 
by  telegraph  and  letter,  putting  up  their  margins  and 
buying  or  selling  with  characteristic  ardor  and  bold- 
ness, which  has  often  been  acquired  in  other  lines  of 
business,  for  there  are  many  fields  of  speculation 
besides  the  Stock  Exchange. 

"You  Americans.  Ah!  you  are,  in  fact,  a  people 
reckless,"  says  Myer,  late  of  the  Paris  Bourse,  "we 
do  these  things  better  in  the  beautiful  France."  You 
are  wrong,  Myer.  More  safely,  perhaps,  but  not  bet- 
ter. If  a  venture  is  safe,  it  is  not  a  speculation. 
Safety  is  hardly  an  element  in  the  calculation.  It  is 
the  risk,  after  all.  The  greater  the  risk,  the  greater 
the  profit  seems  like  a  paradox,  but  it  is  generally 
true.  Boldness,  shrewdness  and  nerve,  pluck  the 
flower  fortune  out  of  the  nettle  danger,  and  boldness, 
shrewdness  and  nerve  are,  at  least,  American  traits. 
No  doubt  the  volume  of  business  on  the  Bourse  is 
very  great,  but  after  all,  how  paltry  seems  the  indi- 
vidual enterprise  of  the  French  speculator,  compared 
to  the  magnificent  daring  of  the  American.  Enter 
the  Bourse  from  the  east,  on  the  Rue  Notre  Dame  des 
Victoires,  place  yourself  in  one  of  those  high,  arched 
windows,  which  surround  the  interior,  and  beneath 
that  vaulted  and  frescoed  dome,  you  will  see  a  tu- 


A   PICTURE   OF   THE   BOURSE.  61 

multuous,  vociferating  crowd  of  buyers  and  sellers. 
It  would  seem  as  if  the  end  of  all  things  was  come, 
and  that  the  Frenchmen  had  forgotten  their  reliance 
on  the  Goddess  of  Reason  and  were  clamoring  for 
absolution  from  Saint  Peter.  But  all  this  gesticula- 
tion, fuss  and  fury  is  little  but  "  the  wild  hysteric  of 
the  Celt."  Most  of  these  men  are  buying  small  lots 
of  the  Rentes,  or  five  hundred  francs  in  the  Chemin 
de  fer  du  Nord,  or  the  Credit  Mobilier.  Pshaw!  so 
the  old  women  in  the  Rue  St.  Honore  sell  you  a  plate 
of  fried  potatoes — price  one  sou.  A  few  francs  profit 
gives  our  old  ally  his  cafe  and  omelet,  and  his  modest 
diner  and  vin  at  the  Palais  Royal  with  the  inevitable 
eau  sucre,  whereof  he  pockets  the  spare  lumps. 

How  about  London?  There  is  our  friend  Bull- 
winkle, — he  of  the  weeping-willow  whiskers  and  fine 
Saxon  color,  true  born  Briton  and  agent  of  the  great 
English  house  of  Bearem  &  Bros.,  who  lately  observed 
that  "  really  you  know,  my  dear  fellow,  you  are  a 
young  people,  do  ye  see,  and  should'nt  mention  old 
England  and  this  blasted  country,  in  the  same  breath, 
when  you  talk  of  money."  Quite  true,  we  reply, 
but  those  ten  share  lots  of  stock  dealt  in  at  the  Royal 
Stock  Exchange,  and  those  fortnightly  settlements 
seem  rather  small  and  slow  affairs,  compared  to  the 
vast  bargains  and  sales  made  in  a  breath  in  the  New 
York  Stock  Exchange. 

The  aggregate  volume  of  business  in  an  active  year, 
has  been  estimated  at  $15,000,000,000.  This  does 
not  include  the  principal  part  of  the  dealing  in  Gov- 
ernment Bonds,  (the  amount  of  which  is  enormous, 
though  difficult  to  be  guessed,  even  approximately,) 
or  the  dealings  in  gold,  which,  in  1869,  it  is  estimated, 


62  INSIDE    LIFE  IN   WALL    STREET. 

will  amount  to  nearly  $30,000,000,000,  and  in  those 
famous  two  days,  the  24th  and  25th  of  September, 
1869,  ran  up  to  $800,000,000,  forty  millions  chang- 
ing hands  in  five  minutes.  In  1863,  Addison  G.  Je- 
rome bid  for  six  millions  of  old  Southern  and  was 
ready  to  take  it.  Anthony  W.  Morse  was  in  habit 
of  bidding  for  five  or  ten  millions  of  stock  in  one 
block ;  but  some  of  these  were  bluff  bids,  you  will 
say.  True,  but  they  were  bids  in  open  market,  never- 
theless, and  illustrate  our  proposition  equally  well. 
Transfers  of  a  million  of  gold  or  stocks  from  A  to  B, 
on  a  single  bid,  are  of  almost  daily  occurrence.  The 
weekly  clearings  of  the  Gold  Bank  in  flush  times, 
exceed  a  thousand  millions  of  dollars.  The  receipts 
and  deliveries  of  stocks  and  gold  by  one  firm,  lately, 
were  one  hundred  and  fifty  millions  in  a  month. 
Lockwood  &  Co.  have  received  as  high  as  $5,000  in 
brokerage  in  one  day,  and  this  at  one-eighth  per 
cent,  indicates  a  daily  business  of  four  millions. 
Morse,  the  great  bull  leader  of  1864,  had  fifteen  mil- 
lion dollars  worth  of  stocks  on  call  at  one  time. 

Among  the  gigantic  operations  in  Erie,  New  York 
Central  and  Gold,  during  the  past  five  years,  such 
prominent  firms  as  Lockwood  &  Co.,  David  Groesbeck 
&  Co.,  William  Heath  &  Co.,  Osborne  &  Chapin,  Smith, 
Gould,  Martin  &  Co.,  etc.,  have  held  blocks  of  stocks 
and  gold  to  an  almost  fabulous  amount.  More  than  one 
leading  operator  may  be  found  nearly  any  day  who 
is  long  or  short  of  five  millions  of  stocks  or  gold,  or 
both,  on  his  own  account,  and  these  are  mere  flea-bites 
compared  to  the  great  Hudson,  Harlem  and  Central 
Pool  of  1869,  which,  it  is  said,  hold  directly  or  by 
proxy  from  fifty  to  sixty  millions  in  these  stocks,  be- 


HOW   BUSINESS   IS   DONE.  63 

sides  a  controlling  interest  of  fifteen  or  twenty  mil- 
lions more  in  the  Lake  Shore  consolidated  line. 

How  can  such  immense  business  be  transacted? 
A  large  part  of  it  is  done  by  the  payment  of  the  dif- 
ferences between  the  buying  and  selling  price,  the  se- 
curities bought  and  sold  not  being  actually  delivered. 
The  remaining  portion  of  the  business  is  done  by 
means  of  certified  checks,  a  convenient  device  of  the 
credit  system.  Suppose  B,  a  broker,  has  bought  of  C, 
another  broker,  five  thousand  shares  of  Lake  Shore, 
at  90,  for  which,  he  has  to  pay  $450,000.  B  having 
a  capital  of  only  §50,000,  but  being  of  good  standing 
and  credit,  the  bank  where  he  keeps  his  account  will 
certify  his  check  as  good  for  $450,000,  though  he  may 
then  have  only  $10,000  on  deposit.  Before  three 
o'clock,  p.  M.,  B  will  have  obtained  a  loan  on  the  five 
thousand  shares,  or  have  delivered  the  stock  to  other 
parties,  who  will  pay  him  for  it  in  certified  checks, 
which  he  will  deposit  in  his  bank,  and  thus  make 
good  his  over-draft. 

These  brokers'  accounts  are  not  taken  by  some  of 
the  banks,  being  founded  as  they  are,  entirely  on 
confidence  in  the  broker,  and  involving  a  certain 
amount  of  risk.  When  money  is  easy,  and  every- 
thing is  bright  in  the  financial  world,  all  may  go  on 
well,  but  in  times  of  stringency  and  panic,  a  bank 
is  occasionally  the  loser  by  this  accommodation.  A 
notable  instance  occurred  five  years  since,  when  a 
certain  "Wall  Street  bank  was  saddled  with  a  loss  of 
nearly  a  quarter  of  a  million  by  an  over-draft  of  a 
prominent  broker,  who  failed  the  day  after. 

The  business  of  a  stock-broker  may  be  classed 
among  those  dark  trades  which  have  a  language  of 


64  INSIDE    LIFE  IN   WALL   STREET. 

their  own  in  which  their  mysteries  are  veiled.  This 
lingo  consists  of  a  variety  of  single  words,  or  concise 
expressions,  which  convey  to  the  initiated  alone,  an 
idea  of  the  operations  of  the  trade,  while  to  the  un- 
initiated, they  are  almost  as  meaningless  as  the  cabala 
of  the  old  Jewish  Rabbins. 

The  word  margin  is  perhaps  the  most  conspicuous 
in  the  Wall  Street  vocabulary.  As  everybody  knows 
this  word  in  its  ordinary  sense,  signifies  a  narrow 
strip  of  land,  an  edge  or  border,  as  the  margin  of  a 
lake,  etc.  In  the  stock-business  it  is,  if  we  may  use 
the  phrase,  a  narrow  strip  of  money,  which  preserves 
the  broker  from  loss,  and  on  which,  the  speculator 
may  be  supposed  to  stand  before  he  has  definitely 
ascertained  the  profit  or  loss  of  an  operation.  Sup- 
pose A,  the  speculator,  gives  B,  the  broker,  one  thou- 
sand dollars,  and  order  him,  B,  to  buy  for  his,  A's,  ac- 
count, one  hundred  shares  of  Rock  Island,  at  par ;  this 
one  thousand  dollars  is  the  margin.  Now,  supposing 
B  to  have  bought  the  stock  at  par,  or  100;  he  pays 
$10,000  for  it.  $1,000  of  this  sum  is  represented  by 
the  margin,  and  $9,000  is  paid  by  B.  If  the  price 
falls  to  93,  B  calls  on  A  for  more  margin,  to  secure 
him  against  loss  if  the  price  should  fall  below  90. 
If  A  fails  to  respond,  and  the  stock  is  sold  at  93, 
A's  loss  is  $700  besides  the  brokerage  for  buying 
and  selling  100  shares,  and  interest  on  the  $10,000, 
which  the  stock  cost.  The  interest  paid  ranges  from 
five  to  seven  per  cent,  per  annum,  but  when  money 
is  dear  the  interest  rises  sometimes  to  a  fearful  rate, 
running  sometimes  to  300  per  cent,  per  annum ;  in- 
deed, the  rate  of  1200  per  cent,  was  paid  for  carry- 
ing stocks  during  the  month  of  September,  1869. 


BROKERAGE  AND  CARRYING  STOCKS.      65 

The  margin  exacted  for  carrying  stocks,  is  from  three 
to  twenty  per  cent,  on  the  par  value  of  the  stock  dealt 
in,  and  depends  partly  also  on  the  kind  of  stock  bought 
or  sold ;  New  York  Central,  a  high  priced  security 
liable  to  wide  fluctuation,  called  for  more  ample  mar- 
gins than  others  which  are  lower  priced,  and  which 
vibrate  less  frequently  and  swiftly.  Governments 
are  dealt  in  on  much  smaller  margins,  which  run  from 
one  to  five  per  cent,  of  the  par  value  of  the  bonds. 

The  brokerage  paid  is  from  three  dollars  and 
twelve  cents,  i.  e.,  one  thirty-second  of  one  per  cent, 
to  twelve  dollars  and  fifty  cents,  i.  e.,  one-eighth  of 
one  per  cent,  on  one  hundred  shares,  which  is  always 
reckoned  at  par,  no  matter  what  the  market  value 
of  the  stock  may  be ;  one  hundred  shares  of  Mari- 
posa,  at  the  price  of  ten  (10),  will  cost  $1,000,  and 
the  brokerage  on  the  purchase  or  sale  of  this  lot  will 
be  the  same  as  on  one  hundred  shares  of  Fort  Wayne 
at  100,  or  one  hundred  shares  of  Delaware  and  Hud- 
son at  150. 

A  broker  is  said  to  carry  stock  for  his  customer 
when  he  has  bought  and  is  holding  it  for  his  account. 
This  carrying  of  stock  is  done  in  various  ways.  Some- 
times the  broker  pays  for  the  stock  with  his  own 
money,  or  with  the  money  he  has  on  deposit  from 
others;  sometimes  he  borrows  money  on  the  stock 
from  banks  or  private  bankers.  When  his  capital  is 
small,  he  carries  his  customer's  stock  by  turning  it. 

A  broker  is  said  to  turn  stock  when  he  sells  it  out 
for  cash,  i.  e.,  deliverable  and  payable  the  same  day, 
and  buys  it  back  regular,  i.  e.,  deliverable  and  paya- 
ble the  next  day.  Under  certain  circumstances,  cash 
stock  and  regular  stock  bear  the  same  price  in  the 


66  INSIDE    LIFE  IN   WALL    STREET. 

market.  But  generally  there  is  a  difference  of  from 
one  thirty-second  to  one  eighth  in  favor  of  the  seller 
of  the  regular  stock.  This  difference  is,  of  course,  paid 
by  the  seller  of  the  cash  stock  in  lieu  of  interest  for 
carrying  it.  When  cash  stock  is  very  scarce,  a  differ- 
ence of  from  one-quarter  of  one  per  cent,  to  four  per 
cent,  exists  in  favor  of  the  cash  stock.  This  scarcity 
of  stock  is  produced  by  the  action  of  rings,  (as  already 
described),  for  the  purpose  of  compelling  the  bears  to 
fulfil  their  contracts.  Thus  occasionally  certain  stocks, 
e.  g.,  Heading,  &c.,  will  sell  regular  at  94,  and  cash  96. 

Again,  when  money  is  very  dear  and  in  seasons  of 
panic,  a  stock  will  sell  for  cash,  one,  two  or  three  per 
cent,  lower  than  the  price  regular.  On  the  29th  of 
September,  1869,  certain  stocks  sold  at  a  difference 
of  four  per  cent,  between  cash  and  regular,  reflecting 
thereby  the  great  apprehension  and  stringency  that 
reigned  in  the  market. 

When  stocks  are  carried,  by  raising  a  loan  upon 
them,  a  stock  note  is  sometimes  given  to  the  lender, 
which  will  read  as  follows,  viz. : 


$?  0,000.  New  York,  Nov.  2Qth,  1869. 

On  Demand,  we  promise  to  pay  to  Jay  Cook  fy  Co., 
or  Order,  Seventy  Thousand  Dollars,  for  value  received,  with 
interest  at  the  rate  of 1  per  cent,  per  annum,  having  deposited 
with  them  as  collateral  security,  with  authority  to  sell  the  same 
at  the  BROKER'S  BOARD,  or  at  public  or  private  sale, 
at  their  option,  on  the  non-performance  of  this  promise,  and 
without  notice,  One  Thousand  Shares  of  Lake  Shore  Rail- 
road Company. 

JOHN  DOE  &  CO. 


67 

But  loans  are  generally  negotiated  without  this 
formality,  by  simply  depositing  with  the  lender  the 
stocks  as  collateral  security,  and  receiving  from 
him  a  check  to  the  amount  of  80  per  cent,  of  their 
market  value.  Nearly  all  these  loans  are  payable 
on  demand,  and  are  termed  in  Wall  Street,  call 
loans. 

When  stocks  are  in  demand  by  the  bears  to  fill 
their  contracts,  they  are  often  carried  by  loaning  them 
to  the  bears,  who  pay  the  holders  the  market  price 
in  currency.  When  the  borrowed  stock  is  returned, 
the  sum  paid  the  holders  is  returned  to  the  bear  bor- 
rower. 

The  following  statement  will  show  the  prices  at 
which  stocks  are  bought  and  sold,  and  the  interest 
and  commissions  paid  for  carrying  stocks,  viz.  : 

100  shares  of  Rock  Island,  at  $100  per  share  will  cost 
$10,000  at  par.     The  market  price  of  the  same  being 
102,  (i.  e.,  2  per  cent,  above  par),  100  shares  bought 
on  the  8th  of  November,  1869,  will  cost       .         .     $10,200  00 
The  brokerage  for  buying  (£  per  cent  on  $10,000),  .         .         1250 
Interest  30  days,  carrying  same  at  7  per  cent.,      .         ,  57  87 

Commissions,  turning  same  (when  money  is  tight),  £  $25, 

again  £  $25,  two  turns,  $50,       ....  50  00 

Brokerage,  selling  same,  (£  per  cent,  on  $10,000),     .         .         12  50 

$10,332  87 
Sold  same  December  8th,  at  104,  (market  price)  $10,400. 

Balance  of  profit  due  buyer,         .         .         .      67  13 

$10,400  00 

(Or,  if  the  price  falls  to  par),  sold  same  at  100,  $10,000 
Balance  loss  of  buyer,     ....  332  87 

$10,332  87 

Sometimes  stocks  are  bought  and  sold  on  buyer's 
5 


68  INSIDE    LIFE  IN"  WALL   STREET. 

or  seller's  option,  as  already  mentioned.     The  follow- 
ing are  copies  of  a  buyer's  and  seller's  option,  viz. : 


BUYER  S    OPTION. 


500  Shares. 

New  York,  Nov  24th,  1869. 

/  have  PURCHASED  of  John  Q.  Brown,  Five  Hun- 
dred Shares  of  the  Stock  of  the  Reading  Railroad  Com- 
pany, at  98  per  cent.,  payable  and  deliverable  at  his  option, 
with  interest  at  the  rate  of  6  per  cent  per  annum. 

JAMES  HO  WARD. 


SELLER  S    OPTION. 


500  Shares. 

New  York,  Nov.  24th,  1869. 

/  have  SOLD  to  Solomon  Stoddard,  Five  Hundred 
Shares  of  the  Stock  of  the  Lake  Shore  Railroad  Company, 
at  90  per  cent.,  payable  and  deliverable  at  my  option,  with 
interest  at  the  rate  of  6  per  cent,  per  annum. 

HENRY  E.  WILSON. 


Either  party  to  one  of  these  contracts  has  the  privi- 
lege of  calling,  within  a  certain  time,  upon  the  other, 
for  a  margin  of  ten  or  twenty  per  cent,  on  the 
amount  of  the  contract.  The  sum,  or  margin  so 
called  for,  is  deposited  in  one  of  the  Trust  Com- 
panies, to  secure  the  party  calling  for  it  against  loss 
on  the  contract.  Parties  who  owe  stocks  on  buyer's 
or  seller's  option,  or  who  have  borrowed  stocks  must 
be  notified  to  deliver  such  stocks  before  and  not  after 
twelve  o'clock,  meridian,  and  all  stocks  are  required 


"OPTIONS   AND    DIFFERENCES."  69 

to  be  delivered  before  quarter-past  two  in  the  after- 
noon. 

The  seller,  in  each  of  these  cases,  is  supposed  to 
carry  the  stock,  and  receive  interest,  and  the  buyer 
to  pay  interest  on  the  contract  price,  until  the  con- 
tract is  closed^  either  by  the  lapse  of  the  time 
named,  or  by  the  buyer  at  his  option,  in  the  one  case, 
or  by  the  seller  at  his  option  in  the  other.  The 
buyer  is  operating  for  a  rise,  and  will  call  upon  the 
seller,  if  the  stock  goes  up  above  the  contract  price ; 
while  the  seller  is  operating  for  a  fall,  and  if  the 
stock  goes  down,  will  buy  it  at  the  reduced  price, 
and  deliver  it  to  the  buyer  at  the  higher  con- 
tract price,  as  we  have  described  in  the  preceding 
chapter. 

Most  of  the  stocks  bought  in  the  market  are  car- 
ried in  other  ways  than  by  these  options. 

A  large  portion  of  the  business  is  transacted,  as 
already  mentioned,  by  paying  differences  instead 
of  actually  delivering  the  stock  called  for.  Suppose 
A  sells  to  B  100  shares  of  Chicago  and  Northwest- 
ern at  75,  A  not  having  -the  stock  to  deliver ;  if 
the  price  falls  to  70,  B  pays  A  $500,  and  if  the 
price  rises  to  80,  A  pays  B  $500  difference  between 
the  present  market  price  and  the  contract  price. 
This  will  explain  how  it  is  that  so  many  do  an  im- 
mense business  on  a  moderate  capital,  for  if  all  the 
stocks  bought  and  sold  in  Wall  Street  were  actu- 
ally delivered,  it  would  require  thrice  the  num- 
ber of  hands,  and  ten  times  the  capital,  to  do  the 
business. 

The  object  of  the  Bankers  and  Brokers'  Association, 
whose  office  is  at  No.  18,  Broad  Street,  is  to  enable 


70  INSIDE    LIFE  IN   WALL    STREET. 

dealers  to  complete  their  contracts  by  paying  differ- 
ences. This  is  done  on  the  Clearing  House  method, 
as  in  the  case  of  the  Gold  Bank,  which  will  be  here- 
after described  j  but  only  a  small  portion  of  the  stocks 
bought  and  sold  are  delivered  through  the  Bankers 
and  Brokers'  Association. 

The  verdicts  of  juries,  and  the  decisions  of  the 
courts,  during  the  past  ten  years,  have,  in  the  litiga- 
tion between  brokers  and  their  customers  made  the  con- 
tract to  carry  stocks,  a  hard  one  for  the  brokers.  Under 
these  decisions,  brokers  have  been  held  liable  to  carry 
stocks,  even  after  the  margin  deposited  with  them  has 
become  exhausted,  and  notwithstanding  the  customer 
has  been  notified  of  the  fact,  and  more  margin  de- 
manded. In  this  way,  brokers  have  sometimes  found 
themselves  incurring  a  heavy  loss,  after  their  cus- 
tomer's stock  has  been  bought  in  or  sold  out  in  default 
of  margin.  A  customer  is  thus  enabled  to  fasten 
himself  on  his  broker,  as  the  old  man  did  on  the 
shoulders  of  Sinbad,  the  sailor,  and  may  compel 
him  to  carry  the  stock  held  for  his  (the  customer's) 
account  through  all  manner  of  panics  and  corners, 
till  a  profit  can  be  shown  on  the  transaction. 

To  meet  this  difficulty,  the  customer  is  asked,  by 
many  of  the  brokerage  houses,  to  sign  some  such 
memorandum  as  the  following,  to  wit  :  — 


,  made  this  20th  day  of  September,  1869. 
FOR  VALUE  RECEIVED,  I  hereby  agree  with  JONES  &  CO.,  BANK- 
ERS AND  BROKERS,  of  the  city,  county  and  State  of  New  York,  that  in 
case  I  shall  be  or  become  indebted  to  them  at  any  time  during  the  ex- 
istence of  this  contract,  for  money  lent  or  paid  to  me  or  for  my  account 
or  use,  or  for  any  overdraft,  or  for  any  deficiency  arising  out  of  con- 
tracts or  transactions  in  or  relating  to  Stock  Securities  or  Gold,  the  said 


THE    GOLD   ROOM.  71 

JONES  &  CO.  may,  in  their  discretion,  sell  at  either  of  the  Brokers' 
Boards,  or  wherever  they  deem  advisable,  or  at  public  auction  or  pri- 
vate sale,  with  or  without  advertising  the  same,  and  with  or  without 
notice  to  me,  all  or  any  property,  things  in  action,  or  collateral  securities 
held  by  them  belonging  to  me,  or  in  which  I  am  interested,  or  may 
hypothecate  or  otherwise  use  the  same,  and  may  apply  the  proceeds  to- 
wards any  such  indebtedness  and  the  interest  thereon,  and  expenses  of 
sale,  or  negotiation,  holding  me  responsible  and  liable  for  payment  of 
any  deficiency  existing  after  such  application. 

And  in  case  of  short  sales,  so  called,  or  time  contracts  on  my  behalf, 
for  sale  or  delivery  of  Stocks  or  Gold,  they  may  protect  themselves  by 
prompt  purchase  in  manner  and  place  as  above  provided  in  case  of  sales, 
whenever  they  may  deem  it  necessary,  and  without  prior  call  on  me, 
holding  me  liable  in  like  manner,  for  any  deficiency. 

And  this  AGREEMENT  shall  never  be  altered  or  annulled  by  any  ver- 
bal agreement,  it  being  the  intention  that  this  contract  alone  shall  con- 
trol all  business  transactions  for  my  account  by  said  JONES  &  CO. 
from  this  20th  day  of  September  until  this  contract  is  surrendered  to 
me,  and  the  possession  of  this  agreement  by  said  JONES  &  CO.  shall 
be  conclusive  evidence  that  it  is  in  full  force  and  effect. 

JOHN  LEICESTER 

In  presence  of  WILLIAM  BBOWN.  (Customer.) 

The  speculation  in  gold  has  its  focus  so  near  that 
of  stocks,  that  they  seem  almost  one.  The  walls  of 
the  gold  exchange  rest  against  those  of  the  stock  ex- 
change in  a  physical  as  well  as  a  moral  sense.  A 
dingy  room,  fifty  by  seventy,  painted  in  sombre  fresco, 
on  the  shady  side  of  New  Street,  hardly  lighted  by 
ten  narrow  windows,  through  which  the  golden  sun- 
light nickers  briefly  of  an  afternoon,  and  then  vanishes 
over  the  tall  blocks  of  brick  and  mortar  which  line 
Broadway.  This  is  the  Gold  Room.  Its  style  of  ar- 
chitecture reminds  one  of  the  shanties  erected  for 
the  temporary  accommodation  of  miners,  working 
some  auriferous  vein,  which  may  any  hour  be  cut  off 


72  INSIDE    LIFE  IN   WALL   STREET. 

by  a  fault  and  cease  to  be  remunerative ;  and  should 
gold  drop  to  par,  this  frail  building  which  covers  the 
busy  bees  in  the  honied  cells  of  the  eighths  and 
quarters  of  the  gold  speculation,  would  speedily  be 
levelled  with  the  ground,  and  in  its  stead  would  rise 
the  more  solid  and  enduring  structure  of  staple  com- 
mercial enterprise.  Inside  this  shell  of  a  building, 
are  numerous  catty-corners  and  nooks,  fenced  off  by 
iron  railings  or  diaphanous  pine  planks.  Into  these 
recesses,  the  weary  operators  retire  and  wait  for  prices 
to  move,  and  then  sally  forth  and  catch  the  halves 
and  units  "living  as  they  rise."  Queer  looking  little 
boys,  whose  knowing  eyes  belie  the  general  vacuity 
of  their  faces,  appear  and  disappear  through  side 
doors  and  gateways.  Voices  rise  and  fall  in  discor- 
dant chorus,  and  in  the  pauses  a  dull  burr  and  rapid 
clicking,  as  of  a  small  cotton  factory,  tells  that  the 
telegraph  is  spinning  out  long  rolls  of  paper  ribbons 
marked  with  quotations  from  the  marts  of  London, 
Frankfort  and  Paris.  The  cast  iron  figure  in  the 
centre  of  the  hall,  (which  ought  to  have  been,  but  is 
not,  a  statue  of  Dame  Fortune,  standing  by  her 
wheel),  throws  up  a  shower  of  spray  which  falls  into 
a  basin,  tinkling  and  clinking  like  coin  of  gold.  The 
operators  grouped  around  it,  hurling  phantom  ten 
thousand  dollar  gold  bricks,  or  staring  at  each  other 
through  the  drops,  look  as  if  they  were  interrogating 
the  fountain  respecting  the  success  of  their  ventures ; 
but  like  the  enchanted  fountain  in  Moore's  song,  it 
(generally)  "  answers  no !"  A  gallery  and  a  space 
fenced  off  below,  is  lined  with  the  anxious,  haggard 
faces  of  speculative  outsiders. 

What  have  we  now,  music  ?      Yes ;  and  strange 


HISTORY   OF   THE    GOLD    EXCHANGE.  73 

music  it  is.  Beside  the  president's  rostrum  there  is  a 
man  sitting  before  a  small  piano,  which  communicates 
by  electricity  with  an  indicator  on  the  wall,  and 
marks  the  ruling  price  of  the  moment.  The  tunes 
played  by  this  piano,  enter  through  the  eye;  both 
the  air  and  the  words  are  expressed  by  figures  which 
ring  on  a  scale  of  prices  which  runs  from  120  to  130 
as  we  write.  On  dull  days,  the  tune  is  lento  ralan- 
tando  slow  and  moderate,  but  on  a  rampant,  or  a 
panic-market,  the  strain  swells  to  an  awful  diapason, 
through  which  is  heard  by  some,  the  paeans  of  vic- 
tory, by  others  the  dirges  of  ruin. 

The  nucleus  of  that  financial  comet,  the  gold  specu- 
lation, distinctly  displayed  itself  first  in  1862,  amid  the 
darkness  of  the  "coal  hole,"  No.  17  William  Street, 
a  place  to  which  reference  has  already  been  made,  in 
connection  with  the  public  board.  It  rose  slowly  up, 
drawing  after  it  a  portentous  train.  In  two  years  it 
reached  its  zenith,  and  covered  half  the  sky  of  specu- 
lation with  its  baleful  light. 

The  magnitude  of  the  operations  in  the  precious 
metal,  rendered  a  separate  room  necessary.  In  the 
summer  of  1864,  Gilpin's  reading-room,  on  the 
ground  floor  of  the  southeast  corner  of  William  Street 
and  Exchange  Place,  was  first  used  as  the  stamping 
ground  of  the  bellowing  herd  which  made  gold  specu- 
lation their  chief  end  and  aim.  Any  subscriber  to 
the  privileges  of  this  reading-room,  (the  yearly  dues 
being  twenty-five  dollars),  could  enter  and  bet  his 
pile  on  the  oscillations. 

Speculators  are  like  jealousy,  "  they  make  the  meat 
they  feed  on."  The  volume  of  business  kept  rolling 
up  in  a  geometrical  ratio,  and  the  limits  of  Gilpin's 


74  INSIDE    LIFE  IN   WALL    STKEET. 

room  soon  became  too  "cabined,  cribbed  and  con- 
fined" for  the  expansive  genius  of  the  gold  men.  A 
cry  went  up,  "  room  for  the  leper !  room ! "  (I  mean 
the  leper  of  modern  finance,  the  gold  speculator. 
This  species  of  leprosy  at  that  time  seemed  to  have 
broken  out  in  great  yellow  blotches  over  a  goodly 
proportion  of  society  here  in  Gotham.)  Haj)py 
thought,  No.  1.  Let  us  resolve  ourselves  into  the 
firm  of  We,  Us  &  Co  !  Happy  thought,  No.  2.  Let 
us  raise  the  admission  dues  to  $100,  then  to  $250, 
then  to  $500,  and  thereby  put  money  into  our  asso- 
ciate purse. 

These  happy  thoughts  occurred  to  certain  veteran 
operators,  and  were  acted  upon  instanter.  One  of 
these  individuals  was  W.  G.  R.,  late  of  the  firm  of 
V.  V.,  R.  &  D.,  a  wiry,  stocky  little  man,  standing  as 
firm  on  his  pins  as  if  he  could  whip  his  weight  in 
wild  cats,  and  looking  as  though  he  were  constantly 
rolling  several  hundred  thousand  in  certificates 
of  his  favorite  metal,  as  a  sweet  morsel  under  his 
tongue. 

A  long,  deep,  low  room,  (the  same  where  the  pub- 
lic board  once  held  its  sessions),  was  soon  fitted  up 
on  the  southeast  corner  of  William  and  Beaver 
Streets,  and  the  multitudinous  firm  of  W.  U.  &  Co., 
rushed  in  and  commenced  business. 

In  the  latter  part  of  the  summer  of  1865,  the 
members  of  this  gold  exchange  moved  into  their  pres- 
ent room  on  New  Street,  which  we  have  already  de- 
scribed. The  admission  dues  of  members  were  raised 
to  $1,000,  then  to  $2,000,  then  to  $5,000,  and  finally 
to  $10,000,  the  last  sum  being  in  the  nature  of  a 
prohibitory  tariff  on  the  vessels  which  desire  to  en- 


THE   GOLD   BANK.  75 

ter  the  quiet  haven  of  fortune  through  this  stormy 
golden  gate. 

The  Gold  Bank  was  organized  and  went  into 
operation  in  December,  1866.  The  object  of  this 
institution  was  by  adopting  a  system  of  clear- 
ance on  the  plan  of  the  Bank  Clearing  House, 
to  simplify  and  facilitate  the  business  arising 
.out  of  the  buying,  selling,  and  delivering  gold. 
The  delivering  and  receiving  from  office  to 
office  of  such  vast  sums  of  gold  as  were  daily 
bought  and  sold  at  the  Gold  Room  entailed  not 
only  great  manual  labor,  but  the  risk  of  loss  and 
theft.  This  trouble  and  expense  is  now  saved. 
The  Gold  Bank  receives  and  delivers  the  gold  and 
collects  the  differences  which  may  be  due  from  or 
to  the  operators,  or  in  other  words,  it  clears  the 
gold  thus,  viz. : 

Jones  &  Co.,  a  brokerage  firm,  buy  from  Brown 
&  Co.,  $100,000  gold  at  1263;  the  gold  costs 
$126,075  in  currency.  Jones  &  Co.  sell  this  sum 
to  Smith  &  Co.  at  128,  the  price  having  risen  1£ 
per  cent,  after  the  purchase.  Then  Jones  &  Co. 
give  the  Gold  Bank  the  following  notice  in  red 
ink,  viz. : 


£7  New  York,  Nov.  8th,  1869. 

NEW  YORK  GOLD  EXCHANGE  BANK. 

&     To  the   Cashier: 

ps 

!>  You  are  advised  that  we  shall  settle  through  the 

g      Charing  Department  to-day,  with  Brown  $   Co.,  $100,000 

3     GOLD  for  $126,075  CURRENCY, 

JONES       CO. 


INSIDE    LIFE  IN   WALL   STREET. 


They  also  give  the  Gold  Bank  the  following  notice 
in  black  ink,  viz. : 


37  New  York,  Nov.  Sth,  1869. 

NEW  YORK  GOLD  EXCHANGE  BANK, 

To  the   Cashier: 

Ton  are  advised  that  we  shall  settle  through  the 
Co.,   $100,000 


^      Charing  Department  to-day,  with  Smith 
9     GOLD  for  $128,000  CURRENCY, 


JONES      CO. 


The  next  morning  the  Gold  Bank  receives 
$100,000  gold,  from  Brown  &  Co.,  for  which  it  pays 
$126,075  in  currency,  and  delivers  the  same  to  Smith 
&  Co.,  who  pay  the  Bank  $128,000  in  currency. 
The  Bank  thus  holds  the  difference  between  these  two 
sums,  amounting  to  $1,025  in  currency,  which  it  pays 
to  Jones  &  Co.,  as  the  profit  of  the  operation.  The 
following  memorandum,  handed  by  Jones  &  Co.  to  the 
Bank,  will  show  the  account  between  them,  viz. : 


5V                   STATEMENT  OF  JONES  fr  CO.,   TO 

NEW  YORK  GOLD  EXCHANGE  BANK, 

Keceived  from 

Gold. 

Rate. 

Currency. 

Deliver  to 

Gold. 

Rate. 
128 

Currency. 

Brown  &  Co. 

$100,000 

126J 

$126,075 
1,025 

Smith  &  Co. 

$100,000 

$128,000 
$128,000 

$128,000 

Currency  due  Jones  &  Co.,  $1,025. 

The  Bank  receives  ten  cents  on  every  ten  thou- 
sand gold  cleared  as  a  compensation  for  so  doing, 
a  very  pretty  percentage  on  yearly  clearances  of 
$20,000,000,000. 


ILLUSTRATED    BY    EXAMPLE.  77 

The  foregoing  is  only  a  brief  and  very  imperfect 
outline  of  Wall  street  and  of  the  Stock  and  Gold  Ex- 
change. Institutions  can  be  best  illustrated  by  their 
moral  workings  on  individuals.  History  by  tragedy, 
comedy,  and  the  limner's  art.  "Wall  street,  too,  shows 
clearest  by  the  portraits,  the  moving  tales  and  comic 
situations,  the  personal  aspects  and  experiences,  of 
the  men  who  have  given  themselves  up  to  the  chances, 
changes  and  struggles  of  a  speculator's  life. 


CHAPTER  HI. 
THE  FIRST  VENTURE. 

A  New  York  Boarding-house  in  Perspective— Wall  Street  Patter— Curb- 
stone Brokers  "At  Home" — A  Flyer  on  Old  Southern — A  Bird  of 
Omen — The  Regular  Brokers  in  Their  Work-shop — Jacob  Little — 
His  Career— The  Napoleon  of  the  Bears— A  Shrewd  Move— He 
Scatters  the  Bulls— His  Character  and  Peculiarities— Old  Southern 
"  Firm  at  the  Close." 

f 

N  the  year  1857,  there  stood  a  three  story  and 
attic  mansion  in  the  lower  part  of  the  City 

^^  of  New  York,  not  many  miles,  or  even  yards, 
from  College  Place.  It  was  the  last  of  a  row  of 
similar  domiciles  which  had  been  shoved  from  their 
foundations,  and  their  place  occupied  by  a  tier  of 
heavy  built  stores,  which  now  reared  themselves  aloft, 
and  looked  down  like  so  many  tall  bullies  with  beet- 
ling brows  upon  the  solitary  dwelling-house,  hustled 
and  crowded  between  them. 

It  was  easy  to  guess  its  history  from  its  appearance. 
In  its  first  years  it  had  been  the  abode  of  an  opulent 
merchant.  But  what  had  once  been  a  private  use 
was  now  a  public  convenience.  It  was  now  fulfilling 
the  destiny  to  which  every  house  in  the  city  would 
seem  to  be  finally  allotted ;  it  was  a  boarding-house. 

A  roomy  habitation  cut  up  into  chambers,  windowed 
or  windowless  and  pigeon-holed  like  a  lawyer's  desk 
with  cells  and  dormitories,  resonant  through  the 


A   COLLEGE   PLACE   BOARDING-HOUSE.  79 

watches  of  the  night  with  the  stertorous  breathing  of 
hard-worked  dry-goods  drummers  or  the  night-mare 
cries  of  dyspeptic  law-clerks. 

The  dining-room  was  a  little  Babel  in  respect  of 
tongues,  a  miniature  New  York  in  respect  of  callings. 
Square  merchants,  angular  lawyers  and  rotund  doc- 
tors loudly  bandying  the  bye-words  and  slang  of  their 
different  professions.  Mysterious  men,  cormorants 
of  "Queer  Street,"  who  seemed  to  extract  a  rich 
sustenance  out  of  the  viewless  air,  like  the  chameleon 
changing  their  color  with  the  objects  of  their  pursuit, 
haunting  hall-ways  and  dusky  basements,  or  on  ele- 
vated perches  with  winking  eyes  and  darting  viscid 
tongues,  ensnaring  the  tiny  insects  of  the  hour.  Old 
buffers,  narrators  of  the  commercial  legends  of  Pearl 
Street  and  studiously  marking  with  intermittent 
glance  in  the  columns  of  the  Journal  of  Commerce, 
the  hoistings  and  tumblings  of  cotton  and  the  ebbings 
and  Sowings  of  tea.  Young  lads,  tyros  in  the  great 
school  of  trade,  to  whose  ears  the  peals  from  the 
cupola  of  old  St.  Paul  might  be  supposed  to  ring  out 
in  prophetic  tones  as  Bow  bells  did  to  Dick  Whitting- 
ton :  "  Turn  again  Dick  Johnson,  or  Jones,  or  Smith ! 
Mayor  of  New  York ! " 

In  this  dining-room  in  the  month  of  June,  in  the 
year  aforesaid,  seated  at  a  side  table,  were  five  per- 
sons of  the  masculine  gender,  swiftly  consuming,  af- 
ter the  fashion  of  their  country,  their  six  o'clock  din- 
ner. An  indescribable  something  about  their  air  and 
manner,  would  have  subtly  but  surely  told  to  the 
thorough-bred  New  Yorker  what  their  occupation 
might  be,  though  a  new  comer  would  have  not  so 
readily  guessed  it.  All  were  nattily  dressed,  but 


80  INSIDE    LIFE  IN   WALL   STREET. 

three  of  them  sat  self-absorbed,  silently  attending  to 
the  important,  rather  than  (to  them)  agreeable  busi- 
ness in  which  they  were  just  then  engaged.  The 
two  others,  however,  amply  made  up  for  the  tacitur- 
nity of  their  companions.  One  of  these  two  was  a 
gentleman  moulded  on  the  cycloidal  pattern.  His 
body,  which  was  as  nearly  circular  as  was  consistent 
with  the  vital  economy,  was  firmly  set  on  a  pair  of 
columnar  legs.  His  head  and  face  was  an  oblate 
spheroid,  hair  curled  like  a  Bacchanal,  eyes  twin  orbs, 
wide  open  and  staring,  eyebrows  well  defined  and 
semi-circular,  as  if  drawn  by  compasses,  his  nose  the 
segment  of  a  circle,  and  his  mouth  a  large,  red  dot ; 
in  fact,  the  two  features  last  named,  seemed  to  form 
a  perpetual  interrogation  point,  expressive  of  wonder- 
ing inquiry. 

The  other  was  built  on  precisely  the  opposite  plan. 
Tall  of  stature,  and  slender  of  limb,  a  long  face,  with 
lantern-jaws,  a  lengthy  nose  and  straight  hair,  he 
might  be  imagined  to  represent  linear  measurement  as 
his  fellow  did,  spherical  and  cubical  contents.  A 
young  lady,  who  sat  at  the  large  table,  had  given  this 
couple  the  sobriquet  of  0.  and  I.  from  their  resem- 
blance to  those  letters  of  the  alphabet,  and  a  young 
gentleman,  fresh  from  the  classic  shades  of  Yale,  was 
wont  to  hail  their  entrance  with  the  words,  lo !  tri- 
umphe  ! 

Sitting  directly  opposite  to  this  couple  at  table, 
my  attention  was  attracted  by  the  strange  jargon 
in  which  they  conversed  in  jerky  staccato  tones. 

"Anything  doing  in  Nicaragua?"  inquired  letter 
0.  of  letter  I.  "  Nothing  said  at  the  close,"  replied 
letter  I.  From  which  I  inferred  they  might  have 


CURB-STONE    BROKERS.  81 

some  connection  with  the  filibustering  in  that  coun- 
try. "  What's  the  price  of  Cumberland  coal  ?  "  asked 
0.  From  which  immediately  a  surmise  arose  that  0. 
and  I.  were  in  the  coal  business. 

"How  is  old  Southern,"  inquired  0.  again.  These 
men  must  be  in  the  theatrical  line,  from  their  in- 
quiring so  familiarly  after  Sothern,  the  actor. 

"  Not  much  margin  on  that,"  said  0,  holding  a  strip 
of  leathery  steak  on  a  fork.  "A  good  sale,"  retorted 
letter  I. 

"Seller  three,"  rejoined  0,  "or  regular?" 

"  Nothing  up  !      and  buyer  three. " 

"  No  commish,"  &c. 

These  observations,  uttered  in  a  jocose  tone,  seemed 
to  give  exquisite  gratification  to  the  whole  five,  and 
strongly  excited  the  risibles  of  0. 

Just  then,  a  grave  gentleman  addressed  him,  in- 
quiring the  news  from  Wall  Street.  This  cleared  up 
the  mystery.  These  men  were  dealers  in  the  stock 
market.  They  soon  rose  from  the  table  and  left  the 
room,  and  the  grave  gentleman  then  informed  me 
they  were  Wall  Street  brokers.  "  Curb-stone  bro- 
kers," said  Mrs.  S.,  correcting  him.  "  Gutter-snipes," 
mamma,  added  the  young  lady. 

The  tribe  of  curb-stone  brokers,  which  in  the  green- 
back era  swarmed  like  locusts  and  filled  the  air  with 
their  importunate  chirk,  in  1857  was  comparatively 
few  in  number.  Their  offices  when  they 'have  offices 
are  merely  desk-rooms  in  upper  lofts  or  murky  base- 
ments. More  generally  the  flooring  of  their  offices  is 
the  sidewalk  and  its  ceiling  the  firmament  "fretted 
with  golden  fire,"  perhaps  we  should  say  with  golden 
fractions — the  eighths  and  quarters  of  the  market 


82  INSIDE    LIFE  IN   WALL    STREET. 

price  which  it  is  their  business  to  catch.  On  a  busy 
day  they  are  all  eyes  and  ears,  scud  and  scamper, 
their  fingers  quivering  like  aspen  leaves,  their  mouths 
pouring  out  a  stream  of  bids  and  offers  disencumbered 
of  all  the  spare  syllables,  while  they  telegraph  sig- 
nals with  the  ten  digits,  and  with  nods  and  winks. 

The  curb-stone  broker  is  the  financial  bud  which 
if  not  nipped  by  some  untimely  frost,  often  blossoms 
into  the  flower  which  blooms  in  the  garden  of  the 
regular  board.  He  works  for  smaller  wages  than  his 
regularly  initiated  brother  of  the  Stock  Exchange. 
In  1870  his  brokerage  is  only  1-32,  or  three  dollars 
and  twelve  cents  for  buying  or  selling  one  hundred 
shares,  in  1857  it  was  1-8,  or  twelve  dollars  and  a 
half,  and  sometimes  only  half  that  amount.  This 
brokerage  is  only  for  buying  and  selling,  for  the  de- 
livering and  carrying  of  stocks  is  done  mostly  by  the 
more  wealthy  brokers  of  the  regular  board.  The 
curb-stone  broker  is  the  scullion  in  the  brokerage 
kitchen,  feasting  on  remnants  and  odds  and  ends,  and 
is  obliged  to  serve  his  time  there  before  he  can  be 
admitted  to  the  banquets  and  privileges  of  the  par- 
lor. His  favorite  stamping-ground  in  1857,  and  as 
late  as  1864,  was  in  William  Street,  between  Ex- 
change Place  and  Beaver  Street. 

A  few  days  after  this,  as  I  was  passing  down  Wil- 
liam Street,  about  ten  o'clock  in  the  morning,  I  ran 
against  0.  (by  which  name  he  will  be  designated  in 
these  pages),  on  the  edge  of  a  crowd  of  thirty  or 
forty  men  who  were  standing  on  the  sidewalk.  He 
saluted  me  with  all  the  familiarity  of  an  old  acquaint- 
ance, and  offered  with  the  greatest  cheerfulness  to 
show  me  the  lions,  or  rather  the  bulls  and  bears  of 


MY   FIRST    VISIT   TO    THE    STREET.  85 

the  street,  fairly  deluging  my  ears  with  his  lingo. 
"  How  is  it  done  ?  Easiest  thing  in  the  world,  put  up 
your  margin,  say  five  hundred  on  a  hundred  shares, 
then  keep  margined  up  or  they'll  sell  you  out.  Buy 
your  stock  any  way  you  like.  Buyer  30,  or  cash,  or 
regular  and  carry  it.  Don't  let  'em  bluff  you.  Never 
sold  short  ?  No  ?  Then  sell  on  a  seller  thirty,  put 
up  your  margin  same  as  before,  or,  if  you'd  rather, 
sell  it  regular  and  borrow  next  day  for  delivery — in- 
terest runs  in  your  favor  on  sellers'  option,  six  per 
cent.  Keep  your  eye  peeled  for  corners.  Brokerage  ? 
One  quarter  per  cent,  each  way.  I'll  do  your  business 
for  an  eighth.  Take  one  of  my  cards  (handing  me 
a  card),  good  references  you  see.  Office  up  three 
flights." 

THE    CARD. 


WILLIAM  L.  P- 


BROKER  IN  STOCKS  AND  BONDS, 

Refers  by  Permission  to 

NO.  49  WALL  STREET, 

J L 4-  Co.,  (Sun  Building,} 

F ,  D A  Co. 


All  this  was  rolled  off  as  glibly  as  the  patter  of  a 
mountebank,  and  as  he  paused  I  detected  him  in  the 
act  of  winking  to  a  short  man  on  the  other  side  of 
the  crowd,  who  looked  very  much  as  if  he  might  be 
the  half-brother  of  Socrate»>  and  who  a  moment  after 
came  round  and  joined  us.  He  hailed  my  friend  0. 
by  the  name  of  Little  Bitters>  which  was  the  name 


86  .    INSIDE    LIFE  LS   WALL   STREET. 

under  which  he  was  known  among  his  Wall  Street 
associates,  though  why  he  should  have  borne  this 
name  it  is  hard  to  say ;  it  was  certainly  not  from  any 
proclivity  to  the  beverage,  and  his  disposition  and 
manners  were  of  the  blandest. 

Socrates  was  duly  introduced  as  Mr.  D.  A  silent 
man  with  a  high  forehead  and  a  face  plowed  into  fur- 
rows by  a  ten  years'  experience  in  Wall  Street,  where, 
as  I  afterwards  learned,  he  had  been  playing  a  game 
of  see-saw,  making  and  losing  alternately,  and  pay- 
ing every  year  a  small  fortune  in  the  shape  of  com- 
missions to  his  brokers. 

His  lofty  brow  and  general  appearance  of  owl- 
ish wisdom,  led  me  to  expect  that  this  man  could 
give  me  the  entire  philosophy  of  speculation  in  a 
few  words,  and  I  was  not  deceived,  for  on  asking  him 
his  opinion  of  the  market,  and  whether  it  would  an- 
swer to  take  a  chance  in,  he  uttered  the  following 
somewhat  turfy  apothegm :  "  You  can't  tell  till  you 
bet."  Quite  true,  Mr.  D.  You  never  can  tell  till 
you  put  up  your  margin,  hi  other  words,  till  you  bet 
in  Wall  Street. 

But  all  this  time,  while  we  stood  there,  the  knot 
of  brokers  and  speculators  on  the  side-walk  were  as 
busy  as  bees  over  a  honey-pot,  coming  and  going, 
brandishing  their  arms  and  vociferating,  making 
notes  in  little  books,  now  buying  stock,  and  running 
back  to  their  offices,  and  reporting  what  they  had 
done,  and  anon  returning  with  fresh  orders  to  buy  or 
sell. 

And  now  a  slender  young  man,  of  twenty-five 
summers,  came  bounding  into  the  crowd.  It  was  R. 
He  was  be-ringed  and  be-je welled  like  a  Rajah,  hatted, 


THE  FAVORITE  STOCK  OF  THE  HOUR.      87 

gloved,  shod,  coated  and  pantalooned,  in  all  the  glory 
of  Broadway  art.  He  seemed  to  know  every  one, 
and  every  one  seemed  to  hail  him  with  empressment, 
mingled  with  respect,  for  he  had  gone  short  of  Old 
Southern  a  few  weeks  before,  and  had  just  bought  in 
at  a  profit  of  twenty-five  thousand. 

Michigan  Southern  and  Northern  Indiana  Railroad 
Stock,  more  familiarly  known  as  Old  Southern,  or 
Old  Sow,  for  short,  is  one  of  the  old  historical 
stocks  of  Wall  Street.  The  name  calls  up  memories 
of  great  fortunes,  won  and  lost  in  its  mighty  vibra- 
tions. The  magic  of  its  rings,  the  unfathomable 
depth  of  its  pools,  are  known  to  many  a  speculator, 
to  his  joy  or  sorrow,  and  most  of  the  great  operators 
of  the  street,  for  the  past  eighteen  years,  have  been 
mixed  up  with  it  for  the  weal  or  woe  of  themselves 
and  the  public.  Little,  the  Litchfields,  Travers  and 
two  of  the  Jeromes,  Henry  Keep,  Daniel  Drew  and 
Cornelius  Vanderbilt,  have  thrown  it  up  and  down, 
like  a  gigantic  shuttlecock,  from  8  to  140. 

Old  Southern  was  the  card  to-day.  It  had  lately 
been  taken  hold  of  by  a  ring  known  as  the  Litchfield 
party,  and  hoisted  to  55,  from  which  point,  it  had 
dropped,  and  was  selling  that  morning  for  38.  Noth- 
ing was  heard  on  the  street  but  Old  Southern,  Buyer 
ten,  Seller  ten,  cash  or  regular.  They  who  had  gone 
short  of  it  at  a  higher  figure,  were  buying  in  and 
covering  their  shorts,  and  bagging  their  profits ;  they 
who  had  gone  long  of  it  at  a  higher  figure,  were  sell 
ing  it  and  ascertaining  their  losses.  Some  were  buy- 
ing for  a  future  profit  (or  loss) ;  the  ring  were  busily 
crying  down  the  stock,  and  all  the  while  quietly  buy- 
ing it  for  another  twist  upwards. 


88  INSIDE    LIFE  IN   WALL    STKEET. 

"I  can  guarantee  you  a  handsome  profit  on  Old 
Southern/'  remarked  0;  "you  see  the  time  to  buy 
stocks  is  when  they  are  down."  This  familiar  truism, 
together  with  the  fact,  that  R,  the  lucky  bear  above 
mentioned,  was  in  the  crowd,  buying  like  smoke,  de- 
cided me.  An  order  was  forthwith  made  out,  signed, 
and  handed  to  0,  as  follows,  to  wit.:  "Buy  for  my 
account  and  risk,  100  shares  of  Old  Southern  at  the 
market;  Buyer  30. "  Signed,  etc. 

0.  then  elbowed  his  way  into  the  crowd  with  the 
air  of  a  man  who  had  important  business  to  transact, 
and  bought  in  a  trice  the  100  shares,  giving  me  a 
memorandum  which  read  thus:  "N.  Y.,  June  — , 
1857, 1  have  to-day  bought  of  W.  B.  C.  &  Co.,  for 
your  account,  100  shares  of  Old  So.  Buyer  30  at 
381."  Signed,  etc. 

Having  handed  0.  five  hundred  dollars  as  a  margin 
on  this  venture,  my  frail  bark  may  be  considered  to 
have  been  duly  launched  on  the  stormy  waters  of 
Wall  Street. 

It  is  the  first  venture  in  speculation  which  costs,  as 
many  a  man  has  found  to  his  sorrow.  Lucky  is  he 
whose  first  flyer  of  one  hundred  shares  shows  a  loss, 
for  this  is  a  lesson  and  a  warning  sufficient  often  to 
turn  him  from  the  career  of  a  stock-operator.  But 
when  the  first  flyer  shows  a  profit,  ah !  that  first 
profit !  The  first  sip  of  the  cup,  this  is  delight,  then 
comes  rapture,  frenzy,  stupor  and  the  dreary  waken- 
ing, in  quick  succession. 

The  sound  of  the  half  hour  stroke  after  ten,  from 
the  belfry  of  Trinity,  had  hardly  died  away,  when 
looking  towards  Wall  Street,  I  saw  approaching,  a 
quaint  figure,  holding  in  its  hand  a  roll  of  stock  cer- 


A   FINANCIER   TASTING   THE   MARKET.  89 

tificates.  It  disappeared  down  a  basement  office  at 
the  corner  of  William  Street  and  Exchange  Place, 
but  was  up  again  on  the  sidewalk  in  a  twinkling.  A 
tall,  slight  figure,  with  a  stoop,  a  black  alpaca  coat 
hanging  loosely  about  it,  walking  towards  the  crowd 
at  a  rapid  pace.  What  a  strange  face  !  The  color- 
ing a  vivid  darkness,  a  clear-obscure,  like  a  tropical 
night.  The  eyes  dark,  with  a  dreamy,  introverted 
look — the  eyes  of  a  philosopher  or  poet,  the  droop- 
ing, sagacious  nose  of  a  financier,  and  the  flexible 
mouth  of  an  orator.  The  expression  mobile,  chang- 
ing not  only  emotionally,  but  in  the  shape  of  the 
features.  As  he  paused  on  the  fringes  of  the  crowd, 
his  lips  were  suddenly  protruded,  as  if  the  market 
were  something  to  be  tested  by  the  sense  of  taste, 
and  then  as  suddenly  withdrawn  to  their  natural  posi- 
tion. Again  they  were  puckered  up,  and  protruded 
as  if  he  were  preparing  to  kiss  something,  perhaps  a 
plump  profit.  Every  motion  and  look  spoke  the  Wall 
Street  man,  and  something  more.  For  during  the 
ten  seconds  that  he  stood  on  the  edge  of  the  walk, 
balancing  himself  on  his  toes,  now  dropping  his  head 
on  his  breast,  now  raising  it  and  looking  over  the 
crowd,  and  turning  it  from  one  side  to  the  other  with 
fitful  glances,  he  seemed  something  uncanny — a  raven 
or  other  bird  of  omen,  hovering  over  the  market,  and 
preparing  to  croak  the  warning  of  panic.  Suddenly 
he  wheeled  about,  and  flitted  through  a  door  opposite 
the  crowd,  on  the  west  side  of  William  Street.  Who 
could  he  be  ?  Gazing  so  intently  upon  him  during 
the  brief  interval  between  his  coming  and  going,  I 
had  till  now  neglected  to  ask  0.,  my  coryphoeus,  the 
name  of  this  strange  looking  personage.  "I  don't 


90  IXSIDE    LIFE  IN   WALL   STREET. 

know  whom  you  mean.  Let's  visit  the  Board,"  re- 
plied he,  "  and  we  will  find  out  who  he  is." 

The  Board  of  Brokers,  in  1857,  and  as  late  as  the 
Fall  of  1865,  (when  they  moved  into  their  new  build- 
ing in  Broad  Street,)  held  their  sessions  in  a  room 
which  overlooked  Lord's  Court,  which  formed  the  cen- 
ter of  a  block,  bounded  on  the  north  by  Exchange 
Place,  on  the  east  by  William  Street,  on  the  south 
by  Beaver  Street,  and  on  the  west  by  Broad  Street. 
"All  roads  lead  to  Rome;"  the  Stock  Exchange 
Room  was  approached  by  many  entrances,  or  rather 
tunnels,  from  different  streets  and  quarters  of  the 
compass.  These  tunnels  led  across  corridors,  up 
stairs  and  down  stairs,  now  dark,  now  light,  and  then 
dark  again,  and  all  converged  into  the  central  mine, 
echoing  with  the  hoarse  cries  of  the  workmen  in 
stocks  as  they  wielded  the  monetary  pickaxe  and 
spade,  or  with  words  like  hammers,  smote  the  drill 
preparatory  to  some  explosion  which  was  to  shake 
the  rooted  pillars  of  finance. 

0.  stuck  closer  to  me  than  a  brother,  and  by  the 
favor  of  one  of  his  broker  friends,  we  were  soon 
ushered  into  a  room  thronged  by  one  or  two  hun- 
dred men,  some  moving  about  in  circles  as  in  a  vol- 
untary tread-mill,  others  in  little  knots,  holding  a 
discussion  or  retailing  gossip  of  the  market,  others 
gathered  in  the  pit,  apparently  waiting  for  the  presi- 
dent to  call  the  stock  which  they  had  orders  to  buy 
or  sell.  The  market  was  at  that  time  full  of  cliques 
and  corners.  Erie,  New  York  Central,  Old  Southern, 
La  Crosse,  and  many  other  stocks  were  under  manip- 
ulation. 

The  call  that  morning  had  run  through  Govern- 


STOCKS  CALLED  IN  THE  BOARD.         91 

ments,  State  Stocks  and  miscellaneous  securities,  and 
now  ERIE  rang  out  from  the  rostrum. 

The  whole  body  of  dealers  rushed  to  the  front, 
red-faced  old  gentlemen,  with  frosty  heads,  left  their 
seats,  and  their  huge  quotation  books,  portly  men 
"sleek  headed  and  such  as  sleep  o'  nights"  undisturbed 
by  dreams  of  panics  and  ruined  customers,  lean  and 
hungry -looking  men  of  sallow  complexion,  youths 
with  shining  morning  faces,  and  promenade  attire, 
all  skated  across  the  floor  with  a  ravenous  eagerness, 
and  yelled  out  bids  and  offers,  poking  their  quivering 
forefingers  almost  into  the  eyes  of  their  competitors. 
In  two  minutes,  the  sharp  fire  of  voices  died  away  into 
a  few  dropping  shots,  and  again  the  president  shouted 
NEW  YORK  CENTRAL.  The  hubbub  rose  again,  and 
swelled  still  louder,  and  then  died  away  as  before. 
Swiftly  the  call  proceeded.  The  name  of  stock  after 
stock,  fell  from  the  president's  lips,  caught  up  by  the 
crowd,  and  tossed  about  from  mouth  to  mouth,  echoed 
from  the  lofty  ceiling,  but  falling  dead  upon  the  cloth- 
lined  walls. 

Here  was  a  new  form  of  the  Wall  Street  lingo — a 
mathematical  form.  These  men  spoke  in  figures, 
instead  of  words,  and  figures  uttered  so  quickly,  and 
poured  out  in  such  numbers,  that  the  spectator  was 
fairly  dizzied:  361,  *,  I,  Hi,  f ,  !,  22,  300,  500.  Only 
the  clear  voice  of  the  presiding  officer,  announcing 
the  closing  bids,  gives  any  idea  to  an  outside  observer, 
of  the  real  price  of  the  stock,  and  as  to  what  has 
been  actually  bought  and  sold  by  any  broker,  that  is 
only  known  to  themselves.  A  single  word — bought 
or  sold — lost  in  the  din,  a  crook  of  the  finger,  a  slight 
nod  of  the  head,  or  a  wink  of  the  eye,  all  unnoticed 


92  INSIDE    LIFE  IN   WALL    STREET. 

by  the  spectator,  settles  the  business  done  between 
the  buyer  and  seller.  This  language  of  signs,  is  as 
distinct  and  definite  a  part  of  the  Wall  Street  lingo, 
as  that  of  words  and  figures.  The  eye  is  the  inter- 
preter here  instead  of  the  ear,  while  the  body,  and, 
fingers,  and  features,  are  the  speaking  organs. 

But  all  the  time  we  had  been  gazing  on  this  curious 
spectacle  from  behind  the  scenes,  the  same  strange 
figure  I  had  noticed  in  William  Street,  was  moving 
restlessly  about,  now  standing  on  the  uppermost  step, 
which  descended  into  the  crowded  pit,  and  buying  a 
sellers'  option,  now  sitting  down  in  a  fidgety  uncer- 
tain way  for  a  moment,  and  then  rising  and  bidding 
where  he  stood,  for  various  stocks,  as  they  were  called. 

When  old  Southern  was  reached,  he  moved  quickly 
to  the  centre  of  the  room,  and  bought  five  hundred 
shares,  sellers'  option,  and  sold  five  hundred  shares, 
buyers'  option,  while  the  crowd  paused  and  turned 
their  eyes  upon  him. 

"Who  is  that  man?"  inquired  I.  "That  man," 
replied  0,  "  that  man  is  Jacob  Little." 

The  portrait  of  this  noted  financier,  which  accom- 
panies these  pages,  is  only  the  faithful  representation 
of  that  face  in  repose,  the  forceful  will,  the  keen 
strong  intellect,  the  swift  play  of  the  feelings,  which 
lighten  up  that  face,  and  shaped  it  into  changeful  suc- 
cessive expressions,  could  never  have  been  brought 
out  by  art.  Jacob  Little !  A  great  name  for  twenty 
years  in  Wall  Street!  Banker,  broker,  operator  in 
stocks,  exchanges  and  cotton,  he  ran  through  the  whole 
scale,  sounding  all  the  heavy  notes,  from  high  to  low. 
He  would  reign  the  king  of  the  market,  fight  a  dozen 
pitched  battles,  suffer  defeat,  abdicate,  and  then  once 


JACOB   LITTLE.  93 

more  ascend  the  throne,  all  in  the  space  of  six  months. 
Master  of  every  kind  of  game  played  in  stocks,  rings, 
corners,  sleight-of-hand,  beggar  your  neighbor,  bluff, 
lock-up  and  bar-out,  straddling  two  horses  going  dif- 
ferent ways,  he  had  the  skill  as  well  as  the  nerve 
to  play  them  all,  and  for  the  most  part  came  out  the 
winner. 

Born  in  Newburyport,  Massachusetts,  the  son  of 
a  ship-builder  in  that  town,  he  came  to  New  York 
when  a  boy,  and  entered  the  office  of  Jacob  Barker, 
another  celebrated  financier,  and  soon  showred  himself 
by  his  diligence  and  shrewdness,  to  be  a  worthy  pupil 
of  his  master,  from  whom  also  he  may  have  derived 
those  brusque  and  almost  rough  manners,  for  which 
he  \vas  afterwards  so  remarkable.  Circumstances  de- 
cided his  future  career  and  policy,  as  they  have  that 
of  so  many  other  men  of  mark.  If  he  had  com- 
menced his  life  as  a  stock  operator  in  1861,  instead 
of  1835,  he  might  have  been  a  great  "Bull,"  and 
have  shared  with  Cornelius  Vanderbilt,  the  spoils  and 
honors  of  his  campaigns.  But  soon  after  he  started 
in  business,  the  financial  omens  all  portended  the 
great  revulsion  of  1837;  this  fact,  and  the  failure  of 
several  banks,  organized  by  Jacob  Barker,  his  former 
employer,  inspired  him  with  distrust  as  to  the  future 
value  of  stock-securities,  and  so  he  became  a  "  Bear." 
When  the  severe  panic  of  that  era  ensued,  lie  wras 
heavily  short  of  stocks,  and  made  enormous  profits 
by  selling  short,  for  several  years  afterwards.  He 
used  to  sell  Vicksburg  Bank  Stock,  and  other  South- 
ern Becurities  on  sellers'  options,  of  one,  two,  and 
thr^e  years,  and  as  those  stocks  fell  almost  to  zero, 
his  profits  were  correspondingly  large.  From  183$, 


94  IXSIDE    LIFE  IN   WALL    STREET. 

to  1845-6,  he  was  the  leading  man  of  the  street,  and 
was  rated  at  two  millions,  a  great  fortune  in  those  days. 

It  was  in  1846,  if  we  are  rightly  informed,  that 
his  first  failure  occurred,  about  the  time  of  the  corner 
in  Norwich  and  Worcester  Railroad  Stock.  In  this 
operation  he  was  contrary  to  his  wont,  a  bull,  and 
attempted  to  control  this  stock,  and  entrap  his  old 
companions  in  arms,  the  bears,  by  compelling  them 
to  buy  in  the  stock,  and  fill  their  contracts  at  95,  or 
thereabouts.  Among  his  associates  in  this  enterprise, 
were  certain  wealthy  Bostonians,  who,  in  order  to 
secure  themselves  against  any  sales  of  the  stock  be- 
low 90,  had  got  Mr.  Little  to  sign  a  bond  in  the  penal 
sum  of  $25,000,  by  which,  he  agreed  not  to  sell  any 
of  the  stock  below  that  price.  But  after  the  corner 
had  been  pushed  to  about  90,  he  found  that  the 
undertaking  would  be  impracticable,  and  that  he 
would  be  plunged  into  irretrievable  ruin  by  proceed- 
ing in  it.  Accordingly,  he  sent  a  large  amount  of 
the  stock  to  Eawdon  &  Groesbeck,  who  had  been  old 
clerks  of  his,  with  directions  to  send  it  to  Boston, 
and  sell  it  there.  The  Bostonians  bought  the  stock, 
in  order  to  sustain  the  market,  and  not  knowing  how 
to  account  for  so  much  stock  coming  on  the  market, 
wrote  to  Mr.  Little,  who  replied,  that  he  had  been 
compelled  to  sell  the  stock,  and  that  he  was  ready  to 
settle  up  on  the  bond,  and  a  few  days  after  sent  them 
a  check  for  $25,000,  which  relieved  him  from  all 
legal  liability  thereupon. 

Mr.  Little's  losses  on  this  Norwich  and  Worcester 
attempted  corner  were  $1,000,000,  but  his  foresight 
had  prevented  a  worse  catastrophe,  and  he  soon  paid 
up  in  full  and  resumed. 


MINE   AND    COUNTERMINE.  95 

Of  course  his  numerous  bear  operations  made  him 
fair  game  for  a  corner,  and  sometimes  he  found  him- 
self surrounded  by  an  army  of  bulls,  whereupon  he 
would  retreat  to  his  last  fortress,  and  after  making 
terms  with  his  besiegers  would  surrender,  and  then 
proceed  to  re-organize  his  shattered  forces.  But  he 
Was  generally  a  hard  man  to  corner,  and  occasionally, 
when  his  antagonists  thought  they  had  accomplished 
their  purpose,  he  would  turn  on  them  and  rout  them 
with  great  slaughter.  Once  he  sold  an  enormous 
quantity  of  Erie  Stock  on  sellers'  options ;  the  bulls 
quietly  took  it,  and  having  bought  up  the  loose  stock 
floating  in  the  market,  proceeded  to  put  on  the  screws, 
bidding  the  stock  up,  and  holding  it  for  the  day 
when  Mr.  Little  would  have  to  deliver  the  stock 
which  he  owed.  No  flaw  could  be  seen  in  the  scheme. 
The  stock  was  held  in  a  firm  grip — the  great  bear 
must  come  to  the  conspirators  and  beg  for  mercy. 
The  eventful  day  for  the  completion  of  his  con- 
tracts was  now  come.  Before  twelve  a  notification 
was  sent  to  the  parties  to  whom  the  stock  was  due, 
that  the  stock  would  be  delivered  immediately,  and 
a  few  moments  after,  in  marched  Mr.  Little  himself, 
bearing  a  huge  bundle  of  fresh  certificates  of  Erie 
Railroad  Stock.  The  bull  party  were  in  consterna- 
tion. They  found  themselves  loaded  with  a  burden 
on  which  they  had  not  calculated.  A  panic  took 
place,  the  market  fell  twenty  per  cent.,  and  Mr. 
Little  had  won  the  day.  How  was  this?  It  ap- 
pears that  the  Erie  Eailroad  Company  had  sometime 
previously  issued  a  large  number  of  certificates 
of  indebtedness,  convertible  into  stock,  (a  fact  un- 
known to  the  bull  party,)  —  these  certificates  had 


96  INSIDE    LIFE  IN   WALL    STREET. 

been  bought  up  by  Mr.  Little,  and  converted  into 
stock  the  morning  of  the  day  when  they  were  de- 
livered. 

The  financial  star  of  Mr.  Little  had,  in  1857,  long 
ceased  to  be  in  the  ascendant,  but  its  influence  was 
still  felt  on  the  opinions,-operations  and  fortunes  of 
the  frequenters  of  the  stock-market.  His  qualities 
of  head,  heart  and  character  were  such  as  had  always 
won  the  respect  and  confidence  of  the  stock-dealing 
public.  Not  the  least  remarkable  amoilg  these  quali- 
ties, was  his  intense  devotion  to  his  life-work — the 
bu}ing  and  selling  of  stocks.  Action  to  him  was 
happiness,  and  in  his  'own  experience  he  seemed  to 
prove  the  truth  of  the  poet's  lines : 

"  Even  when  the  wished  end's  denied, 
Yet  while  the  busy  means  are  plied 
They  bring  their  own  reward." 

Though  he  were  buying  or  selling  millions,  he  thought 
no  detail  of  business  beneath  his  notice.  He  over- 
looked his  clerks  in  his  office,  and  no  one  could  enter 
or  leave  it  without  his  knowledge,  and  any  day  he 
might  have  been  seen  hurrying  through  the  streets, 
diving  into  basements  and  delivering  his  stocks  like 
an  errand  boy.  Sunday  brought  that  busy  brain  and 
hand  little  rest,  for  while  the  bells  were  pealing  the 
hour  of  worship,  he  could  often  be  seen  wending  his 
way  to  his  sanctum  in  "William  Street.  His  amuse- 
ment, his  pleasure,  his  life,  was  business,  business, 
still  business.  The  story  of  operations  so  wide-em- 
bracing, close,  swift  and  daring,  is  among  the  best- 
kept  traditions  of  the  street.  What  a  record  of  the 
thousands  of  millions  bought  and  sold!  What  a 


GOOD    COMMERCIAL    REPUTATION.  97 

tale  of  marvellous  diligence  could  be  unfolded,  if 
that  huge  pile  of  stock  registers  and  ledgers,  now 
amid  the  forgotten  lumber  of  a  garret,  could  be 
opened!  To  make  or  lose  an  immense  fortune  was, 
to  him,  what  a  game  of  chess  is  to  others,  a  pastime. 
More  than  once  he  failed,  owing  a  million  beyond 
what  he  could  pay,  and  in  twelve  months  resumed 
business  with  a  capital  of  a  half  million,  after  paying 
his  entire  indebtedness. 

But  saturated  as  he  was  with  the  spirit  of  Wall 
Street,  and  breathing  as  he  had  done  from  early 
youth  that  moral  atmosphere  so  deadening  and  blight- 
ing to  the  noblest  natures,  he  preserved  not  only  an 
unspotted  commercial  reputation,  but  all  his  native 
kindliness  and  magnanimity.  Beneath  his  blunt 
words  and  ungracious  ways  there  was  a  warm  and 
generous  heart,  often  too  proud  to  accept  favors,  but 
always  ready  to  bestow  them.  He  would  comprom- 
ise the  claims  which  he  held  against  others  for  what 
they  chose  to  offer,  but  constantly  insisted  upon  pay- 
ing his  own  debts  in  full.  In  the  latter  years  of  his 
life  he  failed  for  a  large  amount,  and,  as  usual  in  such 
cases,  gave  his  notes  to  settle  the  indebtedness.  Cer- 
tain friends  of  his  held  some  of  these  notes,  and  not 
expecting  ever  to  call  on  Mr.  Little  for  payment,  or 
that  he  would  ever  be  able  to  pay  them,  had  can- 
celled them,  and  wiped  the  indebtedness  from  their 
books.  But  the  maker  of  the  notes  one  day  put  in 
an  appearance  for  the  purpose  of  taking  them  up, 
having  just  made  one  of  his  great  hits.  He  expressed 
the  greatest  indignation  on  finding  the  notes  had 
been  cancelled,  and  insisted  on  paying  their  amount, 
which  he  accordingly  did. 


98  INSIDE    LIFE  IN   WALL    STREET. 

If  all  the  claims  which  he  had  compromised  during 
his  active  business  life,  and  every  other  debt  which 
was  due  him  could  have  been*  collected,  the  sum  it  is 
said  would  have  amounted  to  several  millions.  As  it 
was,  after  his  death,  out  of  his  old  accounts,  his  friends 
collected  $150,000  as  a  provision  for  his  family. 

For  some  weeks  previous  to  the  morning  referred 
to  in  the  fore  part  of  this  chapter,  Mr.  Little  had  been 
operating  for  a  decline  in  Old  Southern.  But  in  what 
way  he  was  operating  that  particular  morning  was 
not  patent,  at  least  to  the  eyes  of  a  novice.  The 
price  of  Old  Southern  was  firm  at  38i,  and  was  ap- 
parently tending  upwards. 


CHAPTER  IV. 
PROFIT  AND  LOSS. 

Brokers  Adjourn! — Machinery  of  Business — A  Gutter-snipe's   Cock- 
loft— "A  Man  may  Smile,  and  Smile,  and  be  a" Broker — An 

Operator's  Day-Dream — The  Old  Bear  Growls  in  his  Den — The 
Ring  Hoisting  a  Bale  of  Stock— The  First  Profit— A  Broker's  Ac- 
count—Fingering the  Cash— Out  of  the  Woods  into  Wall  Street- 
Flyer  No.  2 — The  First  Loss — A  Short  Sale  and  the  Result — A 
Wild-cat  Bank — Philosophy  of  Speculation — Beware,  Greenhorns! 

T  was  twelve  o'clock,  meridian.  The  call  of 
stocks  was  over,  and  the  brokers,  with  their 

g»  quotation  books  under  their  arms,  were  hur- 
rying out  of  the  door  through  the  tunnel-hall  into 
William  Street,  by  one  exit,  and  into  Exchange  Place 
by  another,  but  a  goodly  number  descended  the  stair- 
case into  Beaver  Street,  and  bent  their  course  to 
lower  Delrnonico,  which  stands  hard  by,  to  refresh 
themselves  with  those  dainty  viands  and  beverages 
so  delectable  to  the  palate  of  the  regular  Wall  Street 
broker,  who  is  almost  invariably  a  delicate  feeder,  and 
a  cautious  drinker,  if  he  would  be  successful. 

While  sitting  in  that  resounding  boudoir  of  finance 
— the  broker's  board — 0.  squatted  on  a  chair  by  my 
side,  was  pouring  into  my  ear  his  explanations  of  the 
mysteries  of  the  trade  in  stocks,  retailing  the  gossip 
of  the  market,  and  pointing  out  the  notable  dealers, 
and  recounting  their  profits  and  losses.  When  the 


100  INSIDE    LIFE  IN   WALL    STREET. 

session  broke  up,  he  rose,  remarking  that  he  must  go 
to  his  office  and  report  what  he  had  done,  and  asked 
me  to  accompany  him  thither. 

A  broker  reports  his  purchases  and  sales  to  his 
office,  so  that  they  may  be  compared,  in  order  to 
prevent  misunderstandings  and  mistakes.  A  clerk, 
or  office  boy  of  the  buyer,  goes  to  the  office  of  the 
seller,  and  announces  to  the  stock-clerk  there,  that 
the  firm  or  individual  who  employs  him  have  bought 
100  shares  of  Old  Southern  or  Lake  Shore,  buyer 
30,  cash  or  regular,  as  the  case  may  be,  and  the 
stock-clerk,  if  the  comparison  is  found  correct,  there- 
upon bawls  out  "all  right."  The  same  form  of 
comparison  is  gone  through  with  by  a  clerk  of  the 
seller,  who  visits  the  office  of  the  buyer  for  that  pur- 
pose. Slips  of  paper  containing  memoranda  of  the 
purchases  and  sales,  and  signed  by  the  respective 
brokers,  are  also  exchanged.  This  report  and  com- 
parison of  purchases  and  sales  clenches  the  bargain, 
and  is  of  course  a  very  necessary  part  of  the  busi- 
ness. 

0.  gripping  my  arm  affectionately,  trundled  along 
through  the  devious  passage  into  William  Street,  and 
so  on,  up  to  the  Sun  building,  on  the  corner  of  Wall 
Street;  then  ascending  three  flights  of  stairs,  puffing 
and  sweating,  he  burst  into  a  small  room  where  a 
tall  man  was  sitting  before  a  solitary  desk  adding  up 
columns  of  figures.  He  turned,  and  I  recognized  my 
table  acquaintance  known  to  the  reader  as  letter  I. 
His  true  name  was  Lansing.  He  was  man-of-all- 
work  in  the  office  of  0.  his  functions  being  those  of 
confidential  clerk,  book-keeper,  stock-clerk,  cashier, 
errand-boy,  and  quasi-partner  withal. 


MACHINERY   OF   BUSINESS.  103 

He  gave  me  a  subdued  greeting,  but  when  0.  in- 
formed him  that  I  had  just  taken  a  flyer  on  100  Old 
Southern,  the  commissions  whereon  redounded  to 
the  profit  of  their  office,  his  face  became  instantly 
wreathed  in  wooden  smiles,  and  dotted  with  dimples 
like  a  figure-head  of  curled  maple.  That  broker's 
smile  with  which  he  greets  a  new  customer,  who 
could  describe  it  but  a  Hogarth  or  a  Dantin?  How 
indifferent,  or  serious,  or  glum  the  expression  of  his 
face  to  the  outsider,  from  whom  he  expects  nothing! 
How  cold  and  repellant  to  the  customer  who  is 
"cleaned  out"  and  marginless!  But  when  the  young 
operator  approaches  him  with  his  pockets  stuffed  with 
greenbacks,  his  nerves  unbruised  by  the  shocks  and 
thrills  of  the  market,  ready  to  encounter  risks  with- 
out a  thought  of  the  danger,  and  buying  and  selling 
with  all  the  vivacity  of  youth,  then  how  the  face  of 
his  broker  expands,  brightens  and  warms.  The  cor- 
ners of  his  mouth  curve  upwards,  the  muscles  of  his 
cheeks  are  hollowed  into  cavities  in  which  the  very 
sylphs  of  mirth  seem  to  lurk,  his  eyes  twinkle  out 
of  semi-circles  of  crows'  feet,  and  his  whole  counte- 
nance appears  to  be  under  the  inspiration  of  Momus, 
the  God  of  laughter. 

"Happy  to  see  you  at  our  office.  Make  it  your 
headquarters.  You've  made  a  good  a  purchase  this 
morning.  Old  Southern  is  sure  to  go  up  again;  the 
ring  are  not  through  with  it.  Keep  watch  of  it, 
however;  don't  let  it  run  away  from  you,  etc.,  etc." 
Under  these  cordial  assurances  of  Lansing,  every- 
thing looked  rose-colored. 

"  What  pleasant  people  these  brokers  are !  What 
a  charming  prospect  is  opened  to  me !  Let  me  see ; 
7 


104  INSIDE    LIFE  IN   WALL   STREET. 

if  Old  Southern  goes  up  ten  per  cent.,  I  shall  make 
a  profit  of  $1,000.  This  sum  I  will  draw  out,  and 
put  $900  into  a  railroad  bond  for  investment,  and 
have  $100  besides  for  pocket  money,  or  I  can  put 
the  $1,000  in  the  bank  as  the  seed-corn  for  a  future 
harvest.  Suppose  I  add  this  $1,000  to  my  present 
margin  and  buy  300  shares  in  my  next  operation, 
make  $3,000  out  of  this  purchase  and  so  on.  In  a 
year  a  fortune  will  have  been  piled  up,  etc. 

These  delicious  reflections  were  interrupted  by  0., 
inquiring  if  I  would  like  to  accompany  Lansing,  his 
factotum,  to  the  office  of  Jacob  Little,  to  compare 
the  100  shares  of  Old  Southern,  (as  I  had  seemed  so 
much  interested  in  his  strange  story,)  or,  as  he  rather 
disrespectfully  phrased  it,  "stir  up  the  Old  Bear  in 
his  den." 

We  went.  The  office  of  Jacob  Little  &  Co.  was  in 
the  old  Merchant's  Exchange,  and  as  we  entered  it, 
we  saw  Mr.  Little  vibrating  between  the  desk  where 
he  generally  stood  and  the  desk  occupied  by  his 
clerks,  now  snatching  up  a  pile  of  stock  certificates 
which  lay  before  him,  and  fumbling  them  over,  and 
now  growling  out  something  to  the  clerks.  When 
he  caught  sight  of  us,  he  stood  eyeing  us  with  nicker- 
ing and  expectant  glance. 

"  Mr.  Little,  we  bought  of  your  firm  this  morning, 
100  Old  Southern,  at  381.  Buyer  30,"  said  Lansing. 

"  Who's  that !     Who's  that  ?  " 

"William  L.  P ,"  returned  Lansing,  giving  O's. 

true  name. 

"Don't  know  anything  about  it;  call  again!  call 
again!  Go  to  Mr.  P.;  he  will  tell  you  all  about 
it!" 


JACOB   LITTLE    "AT   HOME."  105 

"  But,  Mr.  Little,  I  have  just  come  from  Mr.  P.  in 
order  to  compare  this  stock." 

"  Very  well !  Then  go  back  to  Mr.  P.  He  knows 
all  about  it." 

So  saying,  he  resumed  his  vibrations  and  fumblings. 

Fortunately,  just  then,  the  clerk,  of  whom  the 
stock  had  been  bought,  entered  the  office,  and  the 
comparison  was  made  before  Mr.  Little  could  inter- 
rupt him. 

"  He's  a  crusty,  fidgetty  old  fellow,"  remarked  L., 
as  we  walked  up  the  street,  "  and  always  gives  us  a 
heap  of  trouble  when  we  come  to  compare  purchases 
and  sales.  Sometimes  I  slip  into  his  office  slyly,  and 
try  to  compare  with  one  of  the  clerks,  but  he  gener- 
ally sees  me,  and  puts  in  his  oar  and  makes  a  mess 
of  it." 

This  peculiarity  arising  out  of  a  temperament  ex- 
cessively nervous  by  nature,  and  made  more  so  by 
the  excitements  of  business,  grew  on  Mr.  Little,  and 
in  the  last  years  of  his  life,  became  a  source  of  great 
vexation  to  his  brother  dealers. 

Old  Father  Time  is  no  laggard  in  the  stock-market. 
The  sultry  days  of  July  flew  away.  Old  Southern 
was  all  the  while  rising.  During  the  week  which 
followed  June  28th,  the  day  when  my  100  shares  were 
bought,  it  sold  at  46.  Why  was  this?  The  public 
had  no  confidence  in  the  value  of  the  stock.  The 
financial  condition  of  the  company  was  known  to  be 
bad.  Every  morning,  the  New  York  Herald  and 
other  dailies  were  calling  attention  to  the  rottenness 
of  its  concerns,  and  yet,  the  stock  kept  rising.  The 
speculating  public  had  been  selling  it  short.  It  was 
this  that  encouraged  the  bull  party  to  push  it  up,  be- 


106  INSIDE    LIFE  IX   WALL   STEEET. 

cause,  sometime  those  who  had  been  going  short  of 
it,  would  have  to  come  into  the  market  and  buy  it 
of  them  for  delivery.  As  the  whole  amount  of 
the  stock  was  but  $6,000,000,  or  thereabouts,  of 
which,  only  a  portion  was  floating  around  in  the 
street,  it  would  be  readily  handled  by  any  party  who 
saw-  fit  to  take  hold  of  it.  On  the  28th  of  July,  the 
last  day  of  the  option,  the  stock  was  sold  at  53. 
The  following  account  of  0.  will  show  with  what 
result: 


MR. IN  ACCT.  WITH  WILLIAM  L.  P , 

(OTHERWISE  0.) 

DR.  CR. 

To  100  shares  Old  So.,  By  100  Old  So.,  sold 

bought  at  38f,  -$3,862  50  at  53,     .     .      $5,30000 

To  brokerage,  Buying  £,      12  50    By  cash,  (margin,)     .       500  00 

To  brokerage,  Selling*,       1250  $5,80000 

To  interest,  30  days,  6 

per  cent,      .     .         19  05 

$3,906  55 
Balancedue $1,893  45 


$5,800  00  $5,800  00 

The  balance  due  me  then  upon  this  operation 
was  $1,893.45,  from  which,  after  subtracting  $500, 
the  margin  which  I  had  given  0.,  there  remained 
$1,393.45,  as  the  profits  of  my  first  flyer. 

If  there  is  any  feeling  natural  to  the  novice  in 
Wall  Street,  it  is  the  desire  to  look  at  the  cash  results 
of  his  first  profitable  operation,  to  finger  and  crum- 
ple up  the  bank-bills,  whether  crisp  from  the  press, 
or  limp  with  the  manipulations  of  a  hundred  differ- 


HANDLING  A  PROFIT.  107 

ent  possessors,  to  gaze  with  rapture  on  the  classical 
features  of  the  Goddess  of  Liberty  stamped  on  ten 
dollar  coins,  and  chink  the  golden  metal  in  the  capa- 
cious pocket. 

Yielding  to  this  desire,  I  found  courage  to  ask  0. 
to  draw  his  check  for  balance  due.  His  round  face 
lengthened  into  an  oval,  and  a  cloud  of  disappoint- 
ment passed  over  it,  for  he  had  been  feasting  his  im- 
agination on  visions  of  prospective  commissions  from 
his  new  customer.  Slowly  he  filled  out  and  signed 
an  elegantly  engraved  check  which  he  extended 
towards  me  between  his  fat  thumb  and  forefinger, 
then  drew  it  back,  and  gazing  at  the  figures  with 
pride  and  satisfaction,  exclaimed,  "You  should  thank 
me  for  that  little  profit !  come  in  and  see  us  soon  now 
you  know  who  your  friends  are,"  with  which  remark, 
he  handed  it  over  to  me,  his  thumb  and  fingers  seem- 
ing to  nurse  and  fondle  it  till  it  was  folded  up,  and 
passed  into  my  vest  pocket. 

Never  fear,  0. !  this  is  not  the  last  time  that  you 
are  destined  to  see  "that  little  profit."  Again  you 
will  hold  it  as  a  margin,  and  it  will  drop  many  a  com- 
mission into  the  "itching  palm  "  of  that  plump  hand. 

After  the  scuffles  and  heat  and  noisome  odors  of 
the  city,  how  cool  and  calm  and  sweet  the  air  of  the 
pine  and  hemlock  woods.  Reclining  beneath  some 
monarch  of  the  forest,  gazing  at  the  blue  sky,  or  at 
the  sunlight  streaming  in  shafts  of  gold  between  the 
branches,  and  watching  the  wild  and  beautiful  things 
flitting  through  the  air,  or  bounding  along  through 
the  vistas  of  gray  old  trunks,  for  two  weeks,  I  forgot 
that  such  things  as  stocks  and  quotations  ever  existed. 

Returning  to  the  city,  on  taking  my  seat  in  the 


108  INSIDE    LIFE  IN   WALL   STREET. 

cars,  on  one  of  the  great  lines  of  travel,  I  heard  the 
familiar  cry,  "New  York  papers."  Hastily  securing 
one,  I  opened  it,  when  my  eye  fell  on  the  money 
article  where  the  price  of  Old  Southern  was  quoted 
at  36,  a  fall  of  seventeen  per  cent.,  from  53,  the  price 
at  which  I  had  sold,  and  two  per  cent,  below  the 
price  at  which  I  had  bought  my  first  100  shares. 
Here  was  a  chance  for  another  "  little  profit."  It 
fairly  "stuck  out"  to  use  the  street  slang.  It 
swelled  and  took  definite  shape  the  longer  the  mind 
dwelt  upon  it.  The  steam-fiend  which  was  dragging 
the  express  train  at  the  rate  of  forty  miles  an  hour 
was  too  slow  for  eager  fancy  which  was  already  in 
William  Street,  and  had  bought  already  another  100 
shares  of  Old  Southern  at  36. 

It  was  on  a  close,  hot  evening,  on  the  13th  of  Au- 
gust, that  I  stood  on  the  door-steps  of  my  boarding- 
house,  where  I  found  0.  sitting  ready  to  receive  me, 
clad  in  the  lightest  summer  costume,  his  face  rubi- 
cund with  the  heat,  and  radiant  with  good  omens  for 
the  morrow.  "  Lively  times  in  the  street  since  you 
left,"  remarked  he,  "the  ring  have  been  unloading 
Old  Southern,  and  Jake  Little  has  been  selling  it 
right  and  left.  If  you  feel  like  taking  a  turn  in  it 
be  on  hand  to-morrow."  Bright  and  early  the  next 
morning,  I  handed  $1,500  margin  to  0.,  and  ordered 
him  to  buy  300  shares  of  Old  Southern.  This  lot 
cost  341.  In  a  week,  the  price  went  down  to  30,  and 
on  the  advice  of  0.  it  was  sold,  netting  me  a  loss  of 
$1,400. 

The  market  was  reported  as  very  weak  and  declin- 
ing. "  Try  a  short  sale,"  said  0.  I  put  up  more  mar- 
gin, and  tried  a  short  sale  of,  a  hundred  shares,  at  29, 


THE   PANIC   OF    1857.  109 

Seller  10.  Jacob  Little  took  the  contract.  Three 
days  after,  the  Ohio  Life  and  Trust  Company  failed, 
and  the  market  went  down  with  a  jump.  On  the 
26th  of  August,  the  stock  was  bought  in  for  delivery 
to  Jacob  Little,  but  before  it  could  be  delivered,  his 
failure  was  announced.  His  failure  had  occurred  in 
this  wise.  All  along  back  there  had  been  a  differ- 
ence of  from  three  to  six  per  cent,  between  a  buyer's 
option  of  thirty  days,  and  a  seller's  option  of  thirty 
days,  in  Old  Southern  and  other  leading  stocks.  Tak- 
ing advantage  of  this,  Mr.  Little  had  been  selling 
stocks  on  buyers'  options,  and  buying  them  back  on 
sellers'  options,  making  a  profit  on  the  difference. 
When  stocks  fell  so  heavily  the  latter  part  of  August, 
the  stock  on  the  seller's  options  was  delivered  to  him 
at  a  much  higher  price  and  while  the  buyer's  op- 
tions were  still  open.  But  a  few  days  after,  these 
latter  contracts  were  closed,  and  Mr.  Little  resumed 
business,  and  thus  I  was  saved  by  the  skin  of  my 
teeth,  and  bagged  another  profit  of  $900  by  my  first 
short  sale. 

The  day  was  now  approaching  when  another  cycle 
in  the  history  of  American  credit  was  to  be  finished 
with  the  crash  known  as  the  panic  of  1857.  The 
causes  which  led  to  that  panic  are  familiar  to  all. 
It  was  the  discovery  of  gold  in  California  which 
mainly  produced  the  vast  expansion  of  the  Banking 
system.  In  little  more  than  eight  years,  prior  to 
1857,  the  paper  money  circulation  had  nearly  doub- 
led, and  as  early  as  1854,  five  hundred  new  banks  were 
issuing  their  bills,  and  stimulating  trade  and  specula- 
tion. The  basis  of  these  banks  was  the  idea  of  an 
increased  supply  of  the  precious  metals.  But  when 


110  IXSIDE    LIFE  IN   WALL   STREET. 

that  supply  had  been  diminished  by  exportation  to 
Europe,  to  pay  debts  incurred  by  overtrading,  the 
stimulus  was  withdrawn,  and  trade  and  speculation 
alike  collapsed.  American  credit  in  that  era  may  be 
likened  to  a  vessel  ill-built,  badly  worked,  and  carry- 
ing too  heavy  press  of  canvass,  launched  upon  a 
spring  freshet  which  poured  through  the  golden 
sluices  of  Eldorado.  As  the  waters  flowed  on,  they 
broadened  and  grew  shallower.  The  vessel  at  last 
broke  its  rudder,  and  went  aground,  and  there  stuck 
fast  till  a  refluent  tide  could  set  it  afloat. 

He  would  have  been  a  bold  operator,  who,  knowing 
the  dangers,  would  have  dared  then  to  buy  and  sell  in 
Wall  Street.  During  the  eight  weeks  which  suc- 
ceeded the  failure  of  the  Ohio  Life  and  Trust  Com- 
pany, banks  and  brokerage  firms  were  breaking  by 
the  score,  and  the  supposed  profits  of  the  lucky 
speculator  were  liable  to  be  swept  away  in  a  moment, 
or  actually  converted  into  losses  as  the  following 
operation,  which  I  next  engaged  in,  will  show. 

The  market,  towards  the  middle  of  September, 
began  to  brighten,  and  stocks  went  up  for  the  mo- 
ment. This  looked  like  a  favorable  opportunity  to 
operate  for  a  decline,  or  sell  short.  Accordingly,  I 
sold  100  shares  Old  Southern  at  20,  seller  10,  to  an 
operator  named  Slocum,  who  had  been  acting  as  an 
agent  for  certain  western  banks.  A  few  days  after, 
the  stock  was  bought  at  17,  for  delivery  to  Sloeum, 
who  was,  by  his  contract,  bound  to  pay  me  20,  and  in 
this  way  I  should  have  made  a  profit  of  $300.  But 
when  the  stock  was  carried  to  Slocum,  instead  of  pay- 
ing for  it,  he  announced  that  he  was  "  in  deep  waters,'* 
"no  remittances  from  Chicago,"  etc.,  etc.,  but  stated 


A  WILD-CAT   BANK.  Ill 

that  he  "would  be  all  right  in  a  few  days,"  and  would 
take  the  stock  and  pay  for  it  then.  Accordingly,  the 
stock  was  retained,  and  every  day  was  presented  to 
Slocum,  and  every  day  the  same  story  was  told, 
"come  in  to-morrow,"  while  day  by  day  the  price  of 
the  stock  was  falling  from  17  to  16,  from  16  to  14, 
and  so  on,  till  in  ten  days  it  was  selling  at  10. 
Slocum  then  settled  the  matter,  by  giving  his  note 
for  $1,000,  that  being  the  difference  between  what 
he  agreed  to  pay  for  stock,  namely,  20,  and  the 
present  market  price  of  the  stock.  The  stock  was 
then  sold  at  10,  thus  netting  me  an  actual  loss  of 
$700,  against  which,  I  held  the  negotiable  promissory 
note  of  Slocum  for  $1,000,  though  it  would  be  difficult 
to  explain  why  such  a  note  should  be  called  negotia- 
ble, since  I  tried  in  vain  to  negotiate  it  at  a  fifty  per 
cent,  discount. 

While  sitting  in  my  office,  the  morning  before  the 
panic  of  October  13th,  a  tall,  lathy  man,  with  a 
bilious  smile,  walked  in,  and  said  that  he  had  been 
informed  that  I  held  $1,000  of  Slocmn's  paper.  I 
produced  the  note  in  question,  when  he  remarked 
again  that  Slocum  was  "dead  broke,"  and  would 
never  pay  a  cent,  but  he  wished  to  use  the  note  as 
an  offset,  and  was  willing  to  pay  something  for  it, 
perhaps  as  much  as  five  per  cent. 

After  the  due  amount  of  haggling,  the  bargain  was 
struck  at  ten  per  cent.,  and  my  visitor  counted  down 
one  hundred  dollars  in  five's  and  ten's,  looking  suspi- 
ciously new,  on  the  Bentonville  Bank,  Illinois.  To 
my  remonstrances  against  the  character  of  the  money, 
he  produced,  out  of  his  coat  pocket,  a  Bank  Note 
Reporter,  published  the  day  before,  in  which,  the 


112  IXSIDE    LIFE  IN   WALL   STREET. 

notes  of  that  bank  were  quoted  at  only  one  per  cent. 
discount.  As  this  rate  took  off  but  one  dollar  from 
the  hundred  which  lay  upon  the  table  before  me, 
nothing  more  was  said,  and  the  tall,  lathy  man  and 
note  vanished  through  the  door-way. 

I  hastened  to  the  office  of  an  acquaintance,  who 
bought  Western  bank  bills,  and  on  whisking  my  hun- 
dred dollars  over,  and  studying  the  vignettes,  he 
gave  a  long,  doubtful  whistle,  and  said  the  bills  were 
not  salable  in  New  York,  but  that  he  would  forward 
them  to  his  correspondent  at  Chicago  for  redemption, 
though  his  own  private  opinion  was,  the  bank  was  a 
"  wild-cat,"  and  the  currency  was  "  stump-tail  and 
red-dog."  The  bills  went  to  Chicago  by  express,  and 
in  due  time,  something  like  the  following  letter  came 
back  in  reply: 

CHICAGO,  October  18th,  1857. 

To ,  No. Wall  Street,  New  York. 

My  Dear  Sir: — Your  valued  favor  of  date  12th  inst.,  received, 
and  also  package  of  ($100)  one  hundred  dollars,  bills  of  the  Benton- 
ville  Bank,  per  express.  In  reply,  I  visited  Bentonville  day  before 
yesterday,  and  found  it  a  small  hamlet,  consisting  of  three  houses  and 
a  grocery  store,  situated  on  a  prairie,  about  ten  miles  from  the  railroad. 
The  back  part  of  the  grocery  store  was  occupied  by  the  bank,  but  as 
this  institution  has  now  suspended  operations,  the  President  and  Cashier 
have  gone  to  Chicago.  I  saw  no  safe  or  other  evidences  of  cash,  and 
so  conclude  the  assets  are  now  in  the  breeches  pocket  of  the  President 
and  Cashier. 

The  bills  have  only  a  nominal  value  in  our  market  of  from  2  to  5 
per. cent.  We  cannot,  to-day,  pay  you  over  2  per  cent.,  should  you 
wish  to  pell  them. 

My  expenses  to  and  from  Bentonville  were  fifteen  dollars,  which  I 
have  charged  to  you. 

mrs  Kespectfully,  c   -p  CULLENDER. 

My  supposed  profit  of  $300  had  thus  resolved  it- 


WHY   MEN   LOSE   MONET   IN   STOCKS.  113 

self  into  thin  air,  and  left  only  the  residum  of  a  little 
bill  of  expense. 

On  footing  up  the  accounts  of  three  months'  opera- 
tions, I  found  my  net  profits  a  trifle  over  one  hundred 
and  forty  dollars.  Rather  a  small  compensation  for 
two  months'  wear  and  tear  in  Wall  Street,  let  alone  the 
risk.  And  now  to  buy  or  not  to  buy,  that's  the  ques- 
tion !  The  memory  of  that  first  profit  was  yet  green 
and  pleasing  to  dwell  upon,  but  listening  to  financial 
explosions  in  quick  succession,  and  gazing  on  tum- 
bling banks  and  fortunes  melting  away,  is  not  calcu- 
lated to  give  assurance  and  nerve  to  the  stock-operator, 
and  accordingly,  shutting  the  ear  to  the  blandishments 
of  hope  and  of  0.,  the  decision  was  not  to  buy  or  sell 
more  for  the  present. 

At  this  point  of  the  narrative,  the  question  natu- 
rally arises,  why  do  most  of  the  operators  in  Wall 
Street  come  out  minus  on  the  sum  total  of  their 
operations?  The  answer  to  this  question  involves 
the  whole  philosophy  of  speculation.  To  the  looker- 
on,  it  seems  the  easiest  thing  in  the  world  to  make 
money  there,  and  so  it  would  be  if  men  only  did  the 
business  on  mercantile  principles,  and  only  took  fair 
mercantile  risks.  But  they  rarely  do.  The  margins 
on  which  stocks  and  gold  are  bought  and  sold,  are  too 
small.  Any  merchant  doing  business  properly,  will 
fortify  himself  with  a  margin  of  from  thirty  to  ninety 
per  cent,  on  the  amount  of  business  he  does,  while 
the  ordinary  stock  operator  buys  and  sells  stocks  on  a 
margin  of  from  three  to  twenty  per  cent,  on  stocks, 
and  of  from  one  to  ten  per  cent,  on  gold.  Add  to 
this  the  fact,  that  most  of  the  outside  public  buy 
stocks,  when  they  are  high  and  rampant,  and  sell 


114  INSIDE    LIFE  IN   WALL    STREET. 

short,  when  they  are  low  and  weak.  Now  suppose 
one  thousand  men,  with  an  aggregate  capital  of 
$5,000,000,  who  have  bought  or  sold  stocks  on  the 
above  insufficient  margin,  and  ten  men  like  Yander- 
bilt,  Drew,  etc.,  whose  interest  is  opposed  to  that  of 
the  one  thousand  aforesaid,  and  whose  capital  is  ten 
times  as  great.  If  these  ten  men  wish  to  make  stocks 
go  down,  they  create  a  panic  by  locking  up  money  or 
in  some  other  way  "clean  out"  the  small  holders, 
and  then  buy  their  stocks  at  low  figures,  make  money 
easy,  and  up  prices  go  again. 

It  will  also  be  readily  seen,  by  any  one  who  reflects 
for  an  instant,  how  intimately  time  enters,  as  an  ele- 
ment, into  every  stock  operation.  Time  fights  on  the 
side  of  the  man  who  buys  a  lot  of  stock  at  a  fair  price 
and  pays  for  it,  inasmuch  as  the  material  interests  of 
our  country  are  steadily  advancing,  on  the  ichole,  and 
the  value  of  the  stock  becomes  enhanced.  Time,  too, 
fights  on  the  side  of  the  man  who  speculates,  when  he 
is  fortified  by  large  margins,  because  he  is  protected 
by  those  margins  from  the  losses  incidental  to  the 
constant  vibrations  of  the  market.  The  man  who 
can  keep  his  position  in  spite  of  the  temporary  con- 
dition of  prices,  is  the  man  who,  in  the  end,  wins. 

The  frequency  of  operations  is  another  fruitful  cause 
of  losses.  Of  course,  brokers  desire  their  customers 
to  buy  and  sell  as  often  as  possible,  because  they  get 
a  commission  on  every  transaction  made.  But  the 
chances  are  against  any  one  who  operates  on  mar- 
gins, and  therefore  the  oftener  he  operates,  the  more 
of  these  dangerous  risks  he  takes.  If,  instead  of 
buying  and  selling  every  day,  and  giving  all  his 
money  to  his  broker  in  the  shape  of  commissions,  he 


HOW   TO   MAKE   MONEY   IN   STOCKS.  115 

would  only  buy  three  or  four  times  a  year,  when 
stocks  are  low  and  after  the  panics  which  periodically 
occur,  and  then  hold  for  a  ten  or  fifteen  per  cent, 
rise,  he  would  find  himself  ahead  of  the  market  when 
he  came  to  make  up  his  yearly  accounts. 

A  most  weighty  maxim,  verified  by  Wall  Street 
experience,  is  this  :  "  Cut  short  your  losses  and  let 
your  profits  run."  This  has  been  the  making  of  many 
a  speculator,  and  yet  how  few  have  the  nerve  to  prac- 
tice it.  Pat  Hearne,  the  late  noted  sporting  man,  was 
wont  to  operate  thus.  He  would  buy  100  shares  of 
some  stock,  and  when  it  rose  one  per  cent,  he  would 
buy  another  100  shares,  and  so  on.  As  soon  as  it  fell 
one  per  cent,  he  sold  the  whole.  This,  everybody 
will  say,  is  a  sound  plan  of  operating.  In  the  rise  of 
1864,  a  well-known  young  operator  made  $80,000  in 
Reading,  by  operating  on  this  principle,  and  lost  it  all 
by  forsaking  this  principle  and  letting  his  losses  run. 
Again,  in  1865,  he  sold  short  100  shares  of  Erie,  on 
credit,  having  no  money  to  use  as  a  margin ;  as  the 
price  fell  he  kept  selling.  This  was  during  the 
Ketchum  break  in  August.  In  four  days  he  made 
$12,000,  but  a  few  weeks  afterwards  he  lost  the 
whole  by  violating  his  principle  of  operation. 

The  practice  of  selling  stocks  short  will  be  found, 
in  the  end,  to  be  invariably  a  losing  business.  For 
while  the  buying  of  stocks,  under  fair  mercantile  con- 
ditions, is  perfectly  legitimate  and  regulated  by  rules 
of  finance,  which  in  the  long  run  bring  the  holder  out 
"whole"  or  with  a  profit,  operations  on  the  "short 
side  "  are  always  nearly  akin  to  gambling,  in  which 
the  "Bank  "  has  a  percentage  in  its  favor  and  on  the 
doctrine  of  chances  is  at  least  the  winner  against  the 


116  INSIDE    LIFE  IN   WALL   STREET. 

gamester  who  bets  his  money  on  the  cards.  If  A  con- 
tracts to  deliver  100  shares  of  a  certain  stock  in  30 
days,  and  if  B  has  the  whole  of  the  stock  in  his  hands, 
how  can  A  close  his  contract  without  paying  B  his 
price  ?  A  history  of  the  fortunes  of  the  leading  bears 
of  Wall  Street,  for  the  past  twenty-five  years,  illus- 
trates our  proposition.  Two  examples  will  "point  our 
moral"  if  not  "adorn  our  tale,"  viz.:  Daniel  Drew 
and  Jacob  Little. 

The  losses  which  the  former  has  sustained  on  the 
short  side  during  the  past  eight  or  ten  years  have 
been  estimated  at  near,  if  not  quite  $7,000,000.  It 
would  not  be  an  exaggeration  to  say  that  if  he  had 
operated  on  the  long  side  with  the  same  boldness, 
craft  and  resources,  which  he  has  used  in  his  short 
operations,  he  would  have  now  been  possessed  of  a 
fortune  approaching  in  amplitude  to  that  of  his 
great  rival,  Vanderbilt,  who  never  goes  short  of 
stocks.  No  doubt  Drew  has  occasionally  made  a 
great  hit,  as  for  instance  in  the  winter  of  1867 
during  the  Erie  break ;  but  his  successes  in  this  line 
have  rather  served  to  diminish  the  grand  total  of  his 
losses  than  to  build  up  a  fortune  on  the  plus-col- 
umn. The  traps  which  have  been  set  for  him  would 
have  been  the  death  of  a  man  of  smaller  means  and 
less  resolution.  But  Daniel  always  makes  terms,  if 
worsted,  and  uses  diplomacy  as  skillfully  as  he  wields 
that  large  hammer  of  his  with  which  he  knocks  down 
the  price  of  stocks. 

The  closing  years  of  Jacob  Little  convey  to  all 
who  would  sell  stocks  short,  a  still  more  instructive 
lesson. 

Still  clinging  to  the  objects  of  a  pursuit  which  was  to 


THE   END   OF   JACOB   LITTLE.  117 

him  a  passion,  his  face  bearing  the  marks  of  the  fierce 
struggles  of  his  life,  a  broken  weird  looking  old  man, 
he  haunted  the  Board  Room  like  a  spectre  where  he 
had  once  reigned  as  a  king,  offering  small  lots  of  five 
shares  of  the  same  stock,  the  whole  capital  whereof 
he  had  once  controlled.  Where  then  were  the  piled 
millions  which  that  cunning  hand  and  scheming  brain 
had  rolled  up  ?  where  the  prestige  of  his  victories  on 
'Change  ?  Gone,  scattered,  lost.  Poor  and  unnoticed, 
he  passed  away  from  the  scene,  and  left  nothing  be- 
hind him  but  the  shadow  of  what  was  once  a  great 
Wall  Street  reputation. 

Men  and  women  of  America  who,  making  haste  to 
be  rich,  and  taking  evil  counsel  would  enter  Wall 
Street  and  put  your  money  on  the  hazard  of  a  die, 
give  heed  to  the  following  maxims,  the  fruit  of  a 
dearly  bought  experience  : 

Buy  only  on  the  amplest  margins. 

Be  an  occasional  and  not  a  constant  operator. 

Cut  short  your  losses,  and  let  your  profits  run. 

Never  sell  what  you  have  not  got. 


CHAPTER  V. 

CORNELIUS  VANDERBILT  AND  DANIEL  DREW. 

A  Panic  in  Stocks,  and  Where  is  the  Commodore  ? — Driving  in  Cen- 
tral Park— Training  for  Wall  Street— Maxims  of  the  Vanderbilt 
Code,  "never  sell  what  you  haven't  got,"  etc. — Anecdotes — Van- 
derbilt the  Bull  and  Drew  the  Bear— A  Parallel  between  the  Two— 
"Uncle  Daniel's"  Portrait  and  Ways— The  "Merry  Old  Gentleman" 
— The  Wisdom  of  the  Serpent,  but  not  the  Harmlessness  of  the 
Dove — Daniel  Drew  as  an  Acrobat—  Straddling  the  Market. 

(EDNESDAY,  September  30,  1869,  a  day  of 
panic.  "  Anguish  and  doubt,  and  fear,  sor- 
row and  pain,"  have  possession  of  the  hearts 
of  the  financiers.  Prices  of  stocks,  which  have  been 
sinking,  for  a  week,  are  now  dropping,  with  a  heavy 
thump.  Values  have  shrunk  $100,000,000.  These, 
are  the  losses  of  stockholders.  The  tallest  column, 
of  all — New  York  Central —  which  stands  under  the 
dome  of  the  stock  market,  has  broken  at  the  top,  and 
is  crumbling  off,  in  sections,  which  shake  the  founda- 
tion, as  they  fall. 

Among  all  the  crowd,  which  that  day  thronged 
hall  and  stairway,  of  the  stock  exchange,  struggling 
vainly  to  arrest  the  panic,  or,  standing  and  gazing, 
upon  the  full  extent  and  hopelessness,  of  their  losses, 
where  was  he,  whose  stake  in  that  perilous  game, 
was  the  largest,  and  who  was  liable  now  to  pay  a  for- 
feit of  millions  ? 


VANDERBILT   IN   CENTRAL   PARK.  119 

Sun  and  sky  mock  with  their  brightness,  the  gloom 
which  hangs  over  the  market  place.  It  is  a  day  for 
the  velvet  turf,  and  not  for  the  stony  pavement. 
Passing  from  Wall  street,  into  Central  Park,  on  such 
a  day,  is  like  going  from  Tartarus,  into  the  fields  of 
Elysium.  The  distorted  and  forbidding  faces,  have 
disappeared,  the  hoarse  cries  died  away,  and  every- 
thing is  peace  and  beauty.  The  very  air  seems 
larger  here,  and  in  the  wide,  smooth,  winding  drives, 
grirn-visaged  business,  puts  on  a  holiday  smile. 
Standing  on  a  slope,  covered  with  a  verdure,  not  yet 
tinged  with  the  sober  coloring,  of  autumn,  we  see 
approaching,  a  light  wagon,  bowling  along,  at  an 
eight  mile  gait,  drawn  by  two  blood  trotters ;  gazelle- 
eyed,  and  slender  of  limb,  as  if  desert-born,  they  tread 
the  earth  daintily,  and  their  hoofs  hardly  dint  the 
ground.  Behind  them,  holding  the  reins,  with  a  light 
and  yet  firm  hand,  is  seated  an  old  man,  with  a  face 
like  a  Roman  senator.  This  is  Cornelius  Vanderbilt, 
the  greatest  railroad  capitalist,  of  the  age.  Forget- 
ful, apparently,  of  his  vast  interests,  that  day  imper- 
iled, and  of  great  losses,  actually  suffered,  he  rides 
along  cool,  thought-free,  chatting  with  the  bloom- 
ing lady,  his  bride  of  six  weeks,  who  sits  by  his  side. 
This  speaks  the  man. 

From  1817,  when  Thomas  Gibbons,  the  great  steam- 
boat man  of  that  period,  recognized  the  promise  of  the 
youth,  till  1870,  when  in  the  lusty  winter  of  his  old  age 
he  dominates  with  such  ease  the  largest  consolidated 
railway  interest  in  the  world,  there  has  been  no  more 
remarkable  figure  on  the  horizon  of  commerce,  than 
Cornelius  Yanderbilt. 

Steam  locomotion  on  water  and  land,  this  has  been 
8 


120  IXSIDE    LIFE  IX   WALL    STREET. 

his  specialty,  the  trade  to  which  he  has  given  the 
energies  of  an  entire  life.  In  this  trade  he  became 
more  than  an  expert — he  displayed  genius.  The 
two-oared  skiff  plied  in  the  bays  of  his  native  island, 
grew  into  a  steamboat,  the  steamboat  multiplied  into 
a  fleet  which  plowed  river,  inland  sea  and  ocean,  and 
the  young  water-man  was  graduated  as  a  commodore 
of  the  commercial  marine,  a  rank  to  which  he  was 
raised  by  the  spontaneous  voices  of  his  countrymen, 
and  a  title  as  worthily  earned  as  if  won  upon  the 
gun-deck. 

He  was  born  on  Staten  Island  in  the  State  of  New 
York,  in  the  year  1794.  His  ancestry  was  of  the 
low  Dutch  stock,  and  he  himself  is  a  worthy  repre- 
sentative of  the  Holland  sailors  of  the  seventeenth 
century,  who  lashed  a  broom  to  the  mast-head  and 
boasted  that  they  swept  the  seas.  At  the  age  of  four- 
teen, he  was  master  of  a  sail  boat.  When  he  was 
eighteen,  he  was  captain  and  part  owner  of  the  largest 
periauger  which  plied  in  the  harbor  of  New  York. 
When  he  was  twenty-three,  he  was  captain  of  a  steam- 
boat, and  within  forty  years  from  that  time  he  had  built 
and  owned  twenty  steamships  and  forty  steamboats. 

We  are,  however,  not  to  speak  of  him  now  as  con- 
nected with  the  industrial  interests  of  the  country 
on  the  water,  but  as  a  Wall  Street  man,  a  railroad 
king,  a  stockholder  and  operator. 

Picture  to  yourself,  reader,  a  man  of  great  natural 
powers  of  mind  and  body,  strengthened  by  training 
in  one  of  the  roughest  of  commercial  schools — the 
running  of  lines  of  steamboats — who  for  nearly  thirty 
years  has  concentrated  his  faculties  upon  one  object, 
viz. :  the  playing  of  games  of  rivalry  and  competition 


HIS   CHARACTER  AS   A  MAN.  121 

as  they  are  played  in  such  a  business — games  requir- 
ing nerve  to  encounter  emergencies  and  risks  and  skill 
as  against  strong  antagonists — and  played  with  heavy 
stakes  on  a  broad  field.  Then  imagine  that  such  a 
man  in  possession  of  vast  winnings  from  these  games, 
with  all  the  ripeness  of  his  wisdom  and  experience, 
and  with  even  the  native  force  of  his  mind  and  will 
unabated,  enters  Wall  Street,  and  devotes  all  these  va- 
rious and  large  resources  to  the  buying,  holding  and 
controlling  of  stocks,  the  forming  of  combinations  and 
the  holding  of  them  together  against  all  opposition, 
and  you  will  have  an  outline  sketch  of  what  Vander- 
bilt  has  been  and  now  is  in  his  Wall  Street  operations. 
Intellect,  resolution,  foresight,  the  ability  to  measure 
and  proportion  means  to  ends,  wealth,  knowledge  of 
men  and  things,  all  conjoined  in  one  man,  these  have 
furnished  a  panoply  of  proof  and  weapons  of  attack 
to  Vanderbilt,  with  which,  like  the  Homeric  hero,  he 
has  always  defeated  and  scattered  the  opposing  hosts 
of  the  market. 

Like  all  great  generals,  he  knows  who  to  select  as 
his  agents  and  coadjutors ;  but  he  bears,  "like  a  Turk, 
no  brother  near  the  throne,"  and  when  an  agent  or 
coadjutor  becomes  too  powerful,  or  puffed  up  with  a 
sense  of  his  own  importance,  he  "  takes  him  down  a 
peg,"  and  then  after  he  has  humbled  him  sufficiently, 
raises  him  again.  Strange  stories  have  been  told  of 
him  in  this  respect,  how  he  has  degraded  men,  his 
associates,  even  those  of  his  own  family,  to  the  ranks, 
when  guilty  of  insubordination,  and  then  promoted 
them  again,  when  they  had  been  sufficiently  humbled. 

His  operations  are  always  for  a  rise  and  never  for 
a  fall;  he  is  a  bull  and  never  a  bear  in  stocks. 


122  INSIDE    LIFE  IN   WALL   STREET. 

Two  facts  appear  to  have  led  him  to  invest  so 
largely  in  railroad  stocks;  first,  the  rapidly  increas- 
ing carrying  trade  of  the  country ;  second,  the 
gross  mismanagement  and  peculation  which  prevailed 
among  railroad  corporations.  The  obvious  corollary 
from  these  facts  is  this,  viz.,  secure  a  controlling  in- 
terest in  a  railroad  stock  at  a  reasonable  price,  man- 
age it  with  economy,  stopping  all  leaks  and  pecula- 
tions, and  then  hold  it  and  wait.  This  is  precisely 
what  Vanderbilt  has  done,  first  in  Harlem,  next  in 
Hudson,  and  finally  in  New  York  Central,  and  with 
what  marvelous  success,  is  known  throughout  the 
land. 

If  the  experience  of  this  man  could  be  cast  into  the 
form  of  maxims,  what  a  code  it  would  furnish  for  the 
young  merchant. 

"I  bide  my  time."  This  is  one  of  his  maxims. 
Its  truth  every  one  can  testify  to,  who  has  ob- 
served what  strange  transformations  and  revenges 
are  brought  about  in  the  stock  market,  by  the  "  whir- 
ligig of  time." 

"  Never  sell  short,"  is  another. 

In  1864,  during  the  memorable  rise  in  Harlem,  so 
the  story  runs,  a  son  of  the  late  Dean  Richmond, 
president  of  the  New  York  Central  Railroad,  who 
had  been  selling  Harlem  at  low  figures,  found  himself 
likely  to  be  several  thousand  dollars  out  of  pocket,  in 
consequence  of  the  upward  movement  of  the  stock. 
In  his  extremity,  he  went  to  Vanderbilt,  introduced 
himself  as  the  son  of  his  old  friend,  told  him  his  situa- 
tion, and  asked  his  advice.  "Never  sell  what  you 
haven't  got,"  grimly  responded  the  Commodore. 
Upon  this  hint  young  Richmond  covered  his  short 


ANECDOTES  OF  VANDEEBILT.         123 

contracts,  and  went  long,  i.  e.,  bought  a  considerable 
amount  of  the  stock,  and  in  a  few  weeks  recovered 
what  he  had  lost. 

"  Never  tell  any  one  what  you  are  going  to  do  till 
you've  done  it,"  said  Yanderbilt,  lately,  to  a  friend, 
who  inquired  of  him  what  was  the  secret  of  success 
in  business. 

That  he  has  practiced  this  adage,  which  sounds 
something  like  a  Hibernianism,  will  be  proved  by 
the  following  anecdote.  In  1850,  the  Pacific  Mail 
Steamship  Company  did  the  carrying  trade  between 
San  Francisco  and  Panama,  and  an  immensely  lucra- 
tive trade  it  was.  To  establish  some  other  line  which 
would  tap  this  trade  would  be,  of  course,  a  great 
object  to  accomplish.  One  day  the  Commodore  was 
observed  in  his  office,  standing  before  a  map  of  the 
western  hemisphere,  and  placing  his  finger  succes- 
sively on  three  points.  The  first  of  these  was  San 
Juan  de  Nicaragua  on  the  Atlantic  shore,  the  second 
was  the  Lake  of  Nicaragua,  the  third  was  the  port  of 
San  Juan  del  Sur,  on  the  Pacific. .  Here  was  a  route 
which,  if  feasible,  would  save  nearly  one  thousand 
miles  of  travel,  and  put  money  in  the  purse  of  him 
who  secured  it.  He  silently  investigated  the  practi- 
cability of  the  route,  and  made  all  his  arrangements 
with  a  view  to  its  establishment.  A  few  days  after, 
the  new  steamer  Prometheus,  owned  by  himself,  lay 
at  the  dock,  fired  up,  and  furnished  with  coal  and  pro- 
visions for  a  cruise.  He  went  on  board,  and  telling  a 
friend  to  give  his  good-bye  to  Mrs.  V.,  that  he  was  off 
for  a  trip,  ordered  the  lines  to  be  cast  off  and  the 
prow  to  be  turned  southward.  In  due  time  he  made 
his  appearance  in  Nicaragua,  where  he  lived  for  six 


124  INSIDE    LIFE  IN   WALL   STREET. 

weeks  on  toast  and  tea,  took  care  of  his  health,  and 
then  returned  to  New  York,  and  organized  what  was 
known  as  the  Nicaragua  Accessory  Transit  Company. 
In  all  his  stock  operations  he  seems  to  proceed  on  the 
basis  of  intrinsic  values,  knowing  that  capital  from  all 
quarters  will  corne  in  to  aid  him  on  that  basis.  As  a 
bull,  he  may  be  said  to  trade  on  the  hopes  of  men ; 
and  herein  he  differs  from  Daniel  Drew,  his  rival  in 
the  market,  who  as  a  bear,  may  be  said  to  trade  on 
financial  fear  and  apprehension,  for  panics  and  general 
declines  in  stocks  result  from  the  timorousness  of 
capital. 

Cornelius  Vanderbilt,  and  Daniel  Drew — how  great 
each  in  his  way,  how  similar,  and  yet  how  different 
they  are !  Both  commenced  without  a  penny.  Drew, 
who  was  born  in  Putnam  County,  in  the  State  of  New 
York,  in  the  latter  part  of  the  last  century,  com- 
menced life  as  a  cattle  drover,  then  became  the  rival 
of  Vanderbilt  in  the  steamboat  business,  and  finally 
was  graduated  as  a  stock  operator. 

Both  of  these  men  have  the  mind  of  crystal,  the 
heart  of  adamant,  the  hand  of  steel,  and  the  will  of 
iron.  Both  are  unscrupulous,  within  the  law,  as  to 
means  to  an  end.  But  both  have  adorned  their 
lives,  by  great  charities,  bestowed  on  their  kind;  Van- 
derbilt, by  presenting  to  the  Government,  in  its  hour 
of  need,  one  million  of  dollars,  in  the  shape  of  the 
magnificent  steamship,  which  bears  his  name,  and 
Drew,  by  the  gift  of  many  hundred  thousand  dollars, 
to  educational  institutions. 

Both,  too,  have  identified  themselves  with  the  ma- 
terial progress  of  the  country,  by  the  great  lines  they 
have  established,  or  held,  on  water  and  land.  Put 


CONTRAST  BETWEEN  VANDERBILT  AND  DREW.    125 

your  ear  to  the  ground,  and  you  can  hear  the  thunder 
of  their  trains,  from  Omaha  to  Manhattan,  all  day 
and  all  night  long.  As  these  words  are  penned,  ten 
thousand  brakemen,  switchmen,  firemen,  and  en- 
gineers, begrimed,  wan,  and  haggard,  are  guiding 
and  goading  on  their  roaring,  screaming  steam- 
serfs,  as  they  drag  to  tide  water,  across  fat  prairies, 
through  black  gorges,  and  over  crazy  trestle-work, 
and  bridges,  the  treasures  of  our  imperial  valley,  and 
gold-veined  mountains,  and  the  spices  and  lustrous 
fabrics  of  India. 

Here  the  resemblance  ceases.  Both  of  these  men,  it 
is  true,  are  playing  a  game  on  the  same  field,  but  in 
a  very  different  way.  Vanderbilt,  is  the  more  daring 
of  the  two.  His  operations,  extend  through  years  of 
time,  and  through  vast  arcs  of  circles;  the  table,  on 
which  he  plays,  covers  one  hundred  million  acres, 
and  the  dice,  with  which  he  plays,  are  loaded  with 
thirty  millions,  of  the  precious  metal. 

Vanderbilt's  intellect  is  the  more  comprehensive, 
Drew's  the  more  subtle.  The  genius  of  the  former, 
is  constructive,  in  building  up  values,  that  of  the  lat- 
ter, is  destructive,  in  depressing  them,  for  Drew  is  a 
most  robust  architect  of  panics.  The  one,  is  the 
greater  strategist,  the  other,  is  the  greater  tactician, 
his  operations,  are  more  rapid,  compact,  and  local. 

In  personal  appearance,  how  totally  dissimilar. 
Vanderbilt,  looks  like  an  anax-andron,  a  king  of  men. 
Seventy-nine  winters  have  not  bowed  that  stately  form, 
or  quenched  the  light  of  that  deep-set  black  eye. 

Three-score  years  and  ten,  and  more,  have  written 
upon  the  figure  of  his  rival,  more  of  the  physical 
signs  of  decay,  but  through  a  wilderness  of  wrinkles, 


126  INSIDE    LIFE  IN   WALL    STREET. 

his  steel-gray  eyes,  twinkle  with  all  the  vitality  of 
one  and  twenty  His  face,  as  it  appears  in  the 
market,  to  those,  who  know  him,  would  form  a  study 
for  a  painter.  An  odd,  grotesque  face,  with  an  air 
of  self-communion,  brooding  over  it,  and  a  pinched 
look,  from  the  corrugated  forehead,  down  the  rect- 
angular jaw.  His  nose,  might  form  a  separate  study. 
It  is  certainly,  the  reverse  of  Roman,  but  to  call  it 
Grecian,  would  be  a  slur  upon  Praxiteles.  It  may  be 
termed  sagacious,  in  every  line,  and  swelling,  a  nose 
to  snuff  a  stratagem  in  the  air,  or  scent  in  the 
"  tainted  gale  "  a  tight  money-market  approaching. 

No  one  would  be  apt  to  associate  with  Vanderbilt 
anything  that  savored  of  the  jocose.  We  involun- 
tarily think  of  him  as  striding  along  with  a  grim 
gigantesque  dignity,  buying  with  a  large  lordly  man- 
ner, thousands  and  tens  of  thousands  of  shares,  pun- 
ishing his  enemies  with  a  remorseless  hand,  and  plac- 
ing his  adversaries  hors  du  combat,  or  as  sitting  like 
a  generalissimo  in  his  office,  issuing  his  orders  to  his 
battallions.  He  is  rarely  known  by  any  nick-name 
except "  the  Commodore,"  or  the  great  consolidator, 
though  his  intimate  friends  sometimes  speak  of  him 
as  "  Cornele." 

But  Drew  appears  under  a  variety  of  names,  "  the 
Old  Man,"  "Uncle  Daniel/' "the  Ursa  Major,"  "the 
speculative  director,"  "  the  Old  Bear,"  etc. ;  these  are  a 
few  of  the  designations  he  has  received.  Well  too  does 
he  deserve  the  title  of  the  "Merry  old  gentleman"  of 
Wall  Street.  In  his  most  earnest  operations,  he  never 
seems  to  lose  sight  of  "  the  fun  of  the  thing."  His  most 
gerious  moods  are  easily  broken  in  upon  by  ludicrous 
gnggestionsy  and  then  he  gives  vent,  every  now  and 


A   CUNNING   OLD   FOX.  127 

then,  to  short  laughs  which  sound  like  the  cackle 
of  a  hen — thrown  suddenly  off  from  her  propriety. 
He  loves  to  rally  "  the  boys,"  (as  he  is  wont  pater- 
nally to  call  his  younger  speculative  acquaintance,) 
on  their  losses,  or  jest  with  them  over  their  gains  on 
occasions  when,  as  he  would  say,  they  have  "  taken 
a  slice  out  'em."  It  is  "as  good  as  nuts  and  cheese," 
to  him  when  he  has  succeeded  in  getting  up  a  corner, 
or  when  on  a  high  market  he  has  put  out  a  heavy  line 
of  shorts.  He  is  a  mighty  and  versatile  trapper.  No 
game  is  too  small  or  too  large  for  him.  He  lays  his 
net  for  pigeons,  sets  his  springe  for  wood-cock,  digs 
pit-falls  for  bears,  and  lassoes  the  bulls.  What  glee 
in  that  queer  old  face,  as  he  pulls  the  string  to  snare 
the  game,  and  then  bags  them. 

If  a  stranger  were  to  see  him  driving  down  to  his 
office  of  a  morning,  in  his  "  one  horse  shay,"  he  would 
at  once  pronounce  him  some  hard  headed  old  farmer, 
visiting  Broad  Street  for  the  purpose  of  putting  his 
savings  into  a  small  lot  of  government  bonds.  He  who 
would  learn  the  eccentric  habits  and  odd  ways  of  the 
man,  has  only  to  deposit  a  small  margin  with  David 
Groesbeck,  his  partner,  and  one  of  his  brokers, 
and  then  frequent  the  office  and  watch  the  old  man 
as  he  goes  pottering  about,  talking  little,  but  that 
little  in  homely  phrase,  and  with  a  strong  nasal 
twang. 

We  have  said  his  intellect  was  subtle.  The  word 
subtle  does  not  altogether  express  it.  It  should  be 
vulpine.  His  is  the  intellect  of  a  fox  of  the  antedi- 
luvian period,  gigantic  of  size  and  portentous  of  brush. 
He  is  as  fertile  in  shifts  and  ruses  as  Reynard  him- 
self. He  covers  his  tracks,  and  takes  to  the  water, 


128  INSIDE    LIFE  IN   WALL    STREET.       . 

the  underbrush  or  the  open  country  as  circumstances 
may  require.  Traps  innumerable  have  been  set  for 
him,  but  he  generally  eludes  them,  or  if  caught  has 
broken  away,  though  sometimes  torn  and  bloody;  from 
jaws  that  thirsted  for  his  blood,  (or  what  is  much  the 
same,  his  money).  The  hounds  of  the  street,  for 
twenty  years  have  been  following  his  track,  now  in  si- 
lence and  now  baying  in  deep  mouthed  chorus,  when 
they  had  run  him  to  earth,  but  his  twistings,  and  doub- 
lings, and  countless  devices  have  foiled  them  at  last 
and  he  now  sits  in  his  stronghold  with  a  grasp  on  his 
ten  millions,  which  only  the  last  great  enemy  can 
relax. 

Not  the  least  remarkable  circumstance  in  his  career 
as  a  speculator,  is  the  fact  that,  although  for  so  many 
years  he  has  been  operating  for  a  decline  in  stocks, 
and  therefore  laying  wagers  against  the  material 
growth  and  progress  of  the  country,  against  the  in- 
crease of  the  precious  metals  and  paper  money,  and 
the  consequent  enhancement  of  values;  neverthe- 
less he  has  not  only  kept  his  position,  but  grown  in 
wealth.  This  proves  the  ability  and  resources  of  the 
man. 

It  is  fair  to  suppose  that,  considering  his  twenty- 
five  years'  experience  in  Wall  Street,  he  probably, 
more  than  any  of  his  contemporaries,  understands  the 
science  and  practice  of  speculation,  and  in  his  time 
has  accomplished  many  a  feat  requiring  skill  and 
strength. 

Going  long  and  short  of  stocks,  at  the  same  time, 
is  what  is  technically  called  "straddling"  the  market. 
It  is  like  riding  two  horses,  each  going  a  different 
way.  This  difficult  feat  has  often  been  successfully 


A  WALL  STEEET  BATTLE-FIELD.        129 

performed  by  Daniel  Drew,  and  that,  too,  with  a 
lightness  and  agility,  scarcely  to  be  expected  from 
so  aged  an  acrobat.  He  holds,  we  will  suppose, 
40,000  shares  of  a  particular  stock,  which  has  been 
all  paid  for,  and  locked  up  in  his  strong  box.  The 
stock  is  selling  for  par.  He  puts  out  say  20,000  shares 
of  sellers'  options,  running  10,  15  and  30  days.  The 
stock  drops  20  per  cent.  He  buys  his  20,000  shares, 
and  makes  $400,000  by  his  little  flyer.  But  now, 
supposing  a  bull  party  observe  the  "Old  Man"  as  he 
puts  out  his  shorts,  of  course  they  buy  up  the  stock, 
sellers'  options,  etc.,  and  run  it  up  20  or  30  per  cent., 
expecting  to  corner  him.  Some  fine  day,  when 
stocks  are  soaring  heavenwards,  they  are  dismayed 
to  find  themselves  obliged  to  shoulder  large  blocks 
which  come  flying  down  upon  them  from  some  invisi- 
ble quarter.  They  stagger  under  the  load  until  they 
discover  that  they  are  carrying  twenty  or  thirty 
thousand  shares  presented  them  (for  a  consideration) 
by  their  Uncle  Daniel,  and  being  a  part  of  his  40,000 
shares,  long  stock  before  mentioned.  The  conse- 
quence, of  course,  is  a  stampede  of  the  bull  phalanx. 
Daniel's  cunning  eye  is  watching  them  through  a 
loophole  in  the  Fort  de  Groesbeck,  and  he  sallies 
forth  and  hurls  at  the  flying  column,  great  bombards 
of  stock,  which  always  turns  the  defeat  into  a  per- 
fect rout.  Knapsacks,  loaded  with  scrip,  are  thrown 
away,  weapons  dropped,  and  the  battle-field  is 
strewed  with  the  dead  and  wounded.  Then  the 
"  Old  Man,"  with  a  hard  metallic  chuckle,  calls  back 
his  myrmidons,  who  rifle  the  camp  of  the  enemy, 
pick  up  the  stocks  they  have  dropped  in  their  fright, 
and  restore  them  to  their  liege  lord,  who  retires 


130  INSIDE    LIFE  IX   WALL    STREET, 

into  his  stronghold,  and  meditates  new  schemes  of 
ravin. 

But  we  are  anticipating.  The  filling  in  of  the 
portraits  of  Cornelius  Yanderbilt  and  Daniel  Drew 
must  be  done  by  the  light  and  shade  of  our  succeed- 
ing chapters. 


CHAPTER  VI. 
JOTTINGS  ON  THE  "STREET;"  DREW  ON  THE  WAR-PATH. 

More  Philosophy  of  Wall  Street — The  Handwriting  on  the  Wall — A 
Haunted  Heart — The  Panic  Forgotten,  and  "  Richard  is  Himself 
Again" — "Country  Orders  Executed  with  Promptness  and  Des- 
patch ! ' ' — The  Countrymen  Respond  to  the  Cry — ^V  Rustic  Bruiser 
on  Change — My  Little  Commission  Bill — The  Devourers  of  Widows' 
Houses — What  shall  I  buy,  and  How  shall  I  buy  it? — Notes  on  Erie 
— Views  of  the  "  General" — I  buy  One  Hundred  Erie,  and  pay  for 
it,  and  what  came  of  it — Drew  the  King  of  Erie — He  Bulls  Erie  at 
4,  and  sells  it  to  "  The  Boys"  at  40. 

[0  the  man  who  looks  from  without  upon  Wall 
Street  as  the  field  of  speculation,  it  seems  a 
place  of  deep  and  dangerous  mystery.  A 
region  of  dens  and  caves  and  labyrinths  full  of  perils 
which  threaten  loss  and  perhaps  ruin  to  him  who 
enters  there. 

When  mustering  up  courage  he  ventures  in,  and 
standing  in  the  Long  Room,  watches  the  success  of  his 
first  purchase,  all  the  stories  he  has  ever  heard  about 
men  who  have  been  reduced  from  affluence  to  beg- 
gary by  speculating  in  stocks,  flash  across  his  memory. 
He  sees  upon  the  very  walls  inscriptions  of  prediction, 
warning  and  despair,  like  the  cells  where  the  con- 
demned have  passed  their  last  hours.  Some  of  these 
inscriptions  written  with  a  lead  pencil,  vigorously 
anathematize  Vanderbilt.  Some  are  imprecations  on 
Brew  or  Fisk.  Some  are  apothegms  expressing  the 


132  INSIDE    LIFE  IX   WALL    STREET. 

very  philosophy  of  desperation.  All  tell  the  same 
tale  :  '•  I  came  here,  I  speculated,  I  lost.  Beware !  " 

But  he  heeds  neither  counsel  nor  warning  for  the 
hope  of  gain  is  a  stronger  principle  in  human  nature, 
than  the  fear  of  loss.  These  two  active  principles 
underlie  the  whole  practice  of  stock  speculation.  It 
is  the  hope  of  gain  that  induces  a  man  to  buy,  and 
the  fear  of  loss  that  induces  him  to  sell,  often  precipi- 
tately. These  are  the  two  strings  on  which  the  mer- 
riest as  well  as  the  most  doleful  tunes  are  played  by 
the  cunning  Paganini's  of  the  stock  market.  Thus 
a  thousand  brokers  gain  large  incomes  from  their 
customers,  and  great  capitalists  accumulate  immense 
fortunes. 

Those  ceaseless  vibrations  of  the  prices  in  the  stock 
market,  what  are  they  owing  to  except  it  be  the  same 
causes  ? 

To  and  fro,  up  and  down,  backwards  and  forwards, 
•the  speculator  moves  with  the  market  from  the  mo- 
ment when  that  first  profit  slides  into  his  fingers.  Not 
always  interested  pecuniarily ;  absent,  sometimes,  hun- 
dreds of  miles  away,  in  gay  society  or  alone,  studying, 
walking,  riding,  sleeping,  still  is  he  haunted  by  the 
idea  of  fortunes  made  on  'Change  swiftly,  easily,  by  a 
lucky  hit  or  a  quick  succession  of  happy  strokes. 
The  five  fortunate  speculators  of  the  season,  glitter 
in  a  false  light  which  never  discloses  the  hundreds  of 
miserable  losers. 

M.  made  $200,000  in  three  months  on  Pacific  mail, 
commencing  only  with  §10,000.  J.  &  T.  made  a 
million  on  Old  Southern.  B.  went  into  the  market 
with  a  paltry  thousand  and  left  it  with  a  hundred 
thousand.  S.,  a  year  ago,  was  a  clerk  in  a  bank  on 


THE    PAXIC    OF    J857.  133 

a  salary  of  $600;  to-day  he  draws  a  check  with  five 
figures  ou  a  deposit  in  the  same  bank. 

What  has  been  done  may  be  done  again.  Such 
examples  fortify  the  doubts  and  misgivings  which 
possess  the  mind  during  the  first  stages  of  a  specula- 
tive career,  and  stimulate  the  hardihood  and  pride 
that  goeth  before  a  fall. 

The  recollection  of  the  panic  of  1857,  notwith- 
standing its  severity,  and  long  continuance,  soon 
faded  away  from  the  Wall  Street  mind.  The  very 
next  day,  after  the  final  crash,  (October  14th,)  stocks 
began  to  rise  with  a  bound.  Railways  took  the  lead, 
and  bank  stocks  followed.  In  twenty-four  hours, 
American  Exchange  Bank  stock  rose  fifty  per  cent. 

But  the  outsiders  were  still  wary.  The  mercantile 
community,  especially,  from  whom  the  ranks  of  Wall 
Street  operators  are  so  largely  recruited,  now  gene- 
rally kept  aloof.  As  the  winter  was  wearing  away, 
however,  the  old  familiar  faces  of  those  who  had 
been  scared  and  driven  out  by  the  panic,  came  back 
one  after  one.  Wizened  bank  cashiers,  having  recov- 
ered from  their  fright,  sallied  out  from  their  fortresses, 
to  take  a  turn  in  the  street.  Merchants,  weary  with 
brooding  over  piles  of  protested  notes,  came  down  to 
try  and  repair  their  losses,  by  taking  a  shy  at  Pacific 
Mail.  They  who  had  retired  to  the  country  for  re- 
cuperation from  the  fatigues  of  the  season,  now  came 
filing  in,  bringing  with  them  others  who  had  never 
tried  their  luck  in  the  stock-market;  confiding, 
genial-looking  fellows,  their  countenances  rotund 
with  long  sleeps,  and  sleek  with  the  rustic  cheer  of 
the  nitrogenous  bean  and  cabbage,  and  the  carbona- 
ceous sausage ;  they  brought  their  inviolate  margins 


134  INSIDE      FE  ix  WALL  STREET. 


destined  to  furnish  pocket  money  for  a  broker's  holi- 
day. The  spring  equinox  found  the  street  with  very 
much  the  same  appearance  it  had  when  the  narrator 
first  staked  his  modest  five  hundred  dollars.  The 
curb-stone  brokers  were  not  quite  so  clamorous,  their 
brothers  of  the  regular  board  not  quite  so  bustling 
and  important  of  manner,  and  the  general  movement 
of  things  not  quite  so  impetuous  as  the  year  before; 
but  the  fever  of  speculation  was  still  in  the  blood, 
and  was  kept  alive  by  the  fresh  orders  to  buy  and 
sell,  which  always  come  in  after  the  smoke  of  a  great 
financial  conflict  has  cleared  away. 

What  would  become  of  the  market  if  it  were  not 
for  the  countrymen  ?  "  Country  orders  solicited  and 
executed  with  promptness  and  despatch!"  This  is 
the  substance  of  the  advertisement  of  Brokers  and 
Bankers,  we  might  almost  say,  the  burden  of  their  song. 
The  country  always  responds  to  this  solicitation.  The 
four  great  monetary  rivers  that  flow  into  the  Wall 
Street  reservoir  from  the  four  quarters  of  the  compass, 
are  fed  by  a  thousand  streamlets  from  city,  town  and 
village.  The  aggregate  is  a  vast  sum,  a  part  of  which 
goes  into  securities  for  a  permanent  investment,  but 
perhaps  a  still  greater  part  goes,  as  margins,  into 
speculation.  The  countryman  comes  and  takes  a  hand 
in  the  game  which  is  all  the  while  going  on  around 
the  table  of  the  stock  market;  he  is  like  a  young  lion 
who  has  never  known  either  sorrow  or  the  lack  of 
food.  He  is  jovial,  brave,  active  and  sanguine.  Un- 
tutored in  guile,  he  has  always  heard  that  the  Wall 
Street  boys  were  a  sharp  set  of  fellows,  but  he  can- 
not really  understand  why  they  are  so  much  worse 
than  other  folks;  and  then  the  broker  who  takes 


A  BROKER'S  "LITTLE  BILL."  135 

charge  of  his  pecuniary  interests,  is  most  agreeable 
and  gentlemanly  in  his  manners.  In  fact,  the  coun- 
tryman reposes  upon  everything  and  everybody,  with 
a  confidence  at  once  child-like  and  sublime. 

How  gallantly  he  enters  the  field,  and  storms  the 
Malakoffs,  where  the  emperors  of  the  market  lie  en- 
trenched. How  incessantly  he  changes  his  position 
on  the  advice  of  his  very  dear  friends,  with  whom  he 
has  met  in  the  street}  how  obstinately  he  clings  to  a 
loss;  how  resentfully  he  "bucks"  at  the  stock  to  which 
he  owes  his  first  or  last  loss,  and  oh !  what  a  stream 
of  commissions  he  pours  into  the  pocket  of  his  taci- 
turn but  absorbent  broker! 

From  the  history  of  one  of  these  operators,  you  may 
learn  the  history  of  most  of  the  others.  They  make 
money  at  the  start,  while  their  eyes  are  nndazed  by 
illusive  lights,  and  their  judgments  unwarped  by  the 
influences  to  which  they  are  unconsciously  subjected; 
but  in  the  end  they  almost  invariably  lose  all  their 
profits  and  their  original  margins  besides. 

Some  few,  very  few  there  have  been,  however — 
hard-headed,  determined  men,  who,  after  taking  the 
first  heavy  knocks,  have  learned  the  art  and  mystery 
of  the  Wall  Street  trade  and  practiced  it  in  a  most 
slashing  way  upon  the  old  bruisers  of  the  market. 

One  of  these  is  now  in  our  mind's  eye,  a  sturdy 
little  fellow  with  thews  and  sinews  like  a  champion 
of  the  light  weights.  He  came  from  his  native  vil- 
lage into  the  street  in  1862 ;  was  a  bull,  bought 
heavily  and  lost  almost  his  all,  in  the  fall  which  fol- 
lowed the  McClellan  campaign  of  that  year.  Re- 
tiring for  a  while  into  the  country,  he  thought  out 
the  matter,  replenished  his  exchequer,  came  back, 


136  INSIDE    LIFE  IN   WALL    STREET. 

beat  the  trained  speculators  with  their  own  weapons, 
and  retired  in  six  months  with  a  princely  fortune. 

The  year  1858  passed  swiftly  and  in  the  stock 
market,  uneventfully,  away.  Starting  February  with 
the  old  margin  of  five  hundred  dollars,  I  found 
that  after  twelve  distinct  purchases  and  sales,  in 
which  I  had  been  playing  the  ancient  Wall  Street 
game  of  see-saw,  up  and  down,  making  and  losing 
alternately,  upon  looking  over  the  account  in  Decem- 
ber, my  net  profits  were  about  $200.  And  now  first 
occurred  to  me  the  fact  which  strikes  every  one  after 
operating  for  a  time  in  stocks,  viz:  how  fast  the  in- 
terest and  brokerage  items  run  up.  Against  a  profit 
of  $200  there  was  interest  paid  $210,  and  brokerage 
$300.  After  all  my  trouble  and  worry,  only  $200, 
while  my  broker  received  $510.  Deduction  from 
this.  The  broker  takes  the  money,  i.  e.}  the  profit. 
The  customer  takes  the  risk,  of  almost  certain  loss  in 
the  end.  If  the  customer  buys  and  sells  100  shares 
of  stock  every  working  day  in  the  year,  he  will  find 
by  calculation,  that  he  has  paid  his  broker  nearly 
$8,000  in  the  form  of  commissions,  at  the  rate  of 
one-eighth  per  cent,  on  each  transaction.  During  a 
tight  money  market,  he  will  have  paid  a  large  addi- 
tional sum  in  the  shape  of  turns  or  extra  commissions, 
for  carrying  his  stocks,  and  if  he  is  cornered  and  un- 
able to  borrow  stock  for  delivery,  when  short  of  it, 
he  will  have  to  pay  fresh  commissions  for  the  use  of 
stock. 

During  1863  and  1864,  an  active  operator  using 
$20,000  as  a  margin,  discovered  on  perusing  his  ac- 
counts, that  he  had  paid  his  brokers  $25,000  in  the 
form  of  commissions,  and  as  his  capital  of  $20,000 


DISSOLVING   VIEWS    OF   ERIE.  137 

T^as  still  unimpaired,  this  showed  that  he  had  made  a 
profit  of  $25,000,  all  of  which  had  thus  gone  into  his 
broker's  till. 

Another  who  started  with  $10,000,  and  for  four 
years  operated  heavily,  making  and  losing  hundreds 
of  thousands,  at  the  end  of  that  time  had  less  than 
eight  hundred  left  out  of  his  original  capital,  but  esti- 
mated the  interest  and  commissions  he  had  paid  his 
brokers  at  the  large  sum  of  $75,000,  and  these  are 
only  two  out  of  hundreds  of  cases. 

Nothing  but  great  profits  will  save  an  operator  from 
having  his  substance  eventually  devoured  in  broker- 
age and  commissions,  and  great  profits  won  by  the 
Wall  Street  trader,  are  the  rare  exceptions.  There 
are  two  remedies  for  this  which  are  certain  and 
speedy :  First,  Never  speculate.  Second,  If  you  must 
speculate,  only  buy  what  you  can  pay  for  and  hold. 
These  remedies  naturally  occurred  to  me,  January  1st, 
1859,  and  as  the  first  of  the  year  is  the  time  gener- 
ally selected  to  adopt  good  resolutions,  I  resolved  that 
whereas  Wall  Street  was  a  delusion  and  a  snare,  I 
would  thereafter  cease  from  speculation. 

Alas !  for  the  good  resolutions  of  the  one  who  has 
felt  the  excitements  of  stock-speculation.  In  five 
months  I  was  once  more  in  the  street,  looking  for 
something  "good  to  buy,"  as  the  operator  would  say. 
But  I  had  made  a  compromise  with  my  first  resolu- 
tion, and  now  determined  to  buy  only  so  much  stock 
as  I  could  pay  for.  What  should  it  be  ?  The  mar- 
ket was  full  of  low-priced  stocks.  There  was  Cum- 
berland at  5, — "a  worthless  fancy;"  Old  Southern  at 
9, — my  associations  with  Old  Southern  were,  on  the 
whole,  disagreeable;  Harlem  at  11, — the  burnt  child 


138  IXSTOE    LITE  IN   WALL   STREET. 

dreads  the  fire,  for  I  had  lost  $200  on  Harlem  in  1858. 
Erie  at  5£.  This  looks  cheap.  Let  me  think. 

This  stock,  so  famous  in  the  annals  of  Wall  Street,  was 
in  a  bad  way  in  1859.  The  company,  for  six  years, 
had  been  going  on  from  bad  to  worse.  Financiering 
constantly  to  meet  its  temporary  wants,  it  had  been 
coming  on  the  market  periodically,  to  negotiate  a  new 
mortgage  to  fund  its  floating  debt.  One  of  these 
different  classes  of  mortgages  was  now  overdue,  the 
road  was  in  default,  a  foreclosure  had  taken  place, 
the  road  was  advertised  for  sale,  and  a  receiver  had 
been  appointed.  The  sale  would,  of  course,  wipe 
out  the  stock,  and  the  public  generally,  looking  for 
this  to  take  place  any  day,  had  marked  the  price 
already  down  to  zero.  A  large  proportion  of  the  old 
investors  had  long  since  sold  out,  and  most  of  the 
entire  capital  stock  was  floating  in  the  street,  at  the 
nominal  market  value  above  indicated.  The  very 
idea  of  investing  in  Erie,  and  holding  it  any  length 
of  time  for  a  rise,  was  sufficient  to  provoke  a  smile 
from  any  broker  who  thought  he  understood  the  finan- 
cial situation  of  things  in  general,  and  of  Erie  in 
particular. 

But  week  after  week  rolled  by  while  I  was  hesita- 
ting what  to  do,  and  still  no  sale  of  the  road  took 
place.  In  September  it  fell  to  4,  and  stacks  of  it 
could  be  bought  at  that  price. 

It  was  one  pleasant  day  in  the  month  last  men- 
tioned, while  standing  in  a  doorway  in  William  Street, 
near  where  the  brokers  used  to  hold  their  street  meet- 
ings, that  I  saw  a  stout  old  gentleman  with  a  white 
head  and  a  merry  eye,  whose  full  name  has  now 
escaped  my  memory,  but  who  in  the  market  was 


DREW   THE   KING   OF   ERIE.  139 

known  as  the  "  General.'*  He  lived  in  one  of  the 
river  towns,  where  it  was  said  he  had  "  done  the  Staw 
some  service"  in  connection  with  the  train  bands  of 
militia,  and  had  the  reputation  of  being  well  to  do 
and  "awful  cunning"  in  his  speculations.  He  was 
full  of  crotchets  and  hobbies,  and  was  never  weary  of 
talking  upon  them  so  long  as  he  could  find  a  listener. 
One  of  these  was  a  strong  prejudice  against  brokers 
as  a  class.  He  was  in  the  habit  of  standing  near  the 
street  crowd  and  venting  his  spite  against  them  by 
calling  them  hard  names.  The  brokers  not  being 
ever  very  sensitive  to  abuse  or  ridicule,  seemed 
rather  amused  than  otherwise  by  these  little  eccen- 
tricities of  the  old  veteran. 

But  his  great  hobby  was  Erie.  He  stood  in  the 
center  of  a  little  knot  of  listeners,  and  was  hold- 
ing forth  on  his  favorite  topic,  looking  very  red 
and  determined,  and  emphasized  each  sentence  by 
bringing  his  cane  down  with  both  hands  upon  the 
pavement.  "Are  you  buying  Erie,  General?"  in- 
quired one  of  his  auditors. 

"  Of  course  I  am  buying  Erie,  and  paying  for  it, 
too.  No  margin  business  for  me.  You  brokers  would 
eat  a  man  up  in  twenty-four  hours,  with  your  com- 
mission, and  interest,  and  infernal  turns.  I  bought  a 
thousand  shares  for  four  thousand  dollars,  this  morn- 
ing, and  here  it  is.  [Producing  the  certificates.] 
That  stock  I  intend  to  sell  at  par." 

"At  0,  more  likely,"  remarked  a  bystander. 

"  Why  don't  you  sell  the  road  out  under  the  decree 
of  the  court,  then  ?  you've  been  threatening  to  for  six 
months.  Why  don't  you  do  it?  What's  Vanderbilt 
doing  now?  Buying  Erie.  What's  Drew  doing? 


140  INSIDE    LIFE  IN   WALL   STREET. 

t lying  Erie,  and  keeping  the  price  down  till  he  can 
t  all  he  wants.  You  wont  hear  anything  more 
about  decrees  of  the  court,  and  foreclosures  of  chattel 
mortgages,  or  sales  of  the  road  at  auction,  when 
Drew  gets  all  the  stock  he  wants." 

"  You'd  better  sell  the  stock  short,  General,"  said 
a  young  broker,  who  had  just  entered  the  circle  of 
auditors. 

"Sell  short!"  retorted  the  General,  "you  boys 
would  sell  the  shirt  off  your  back.  Look  at  Jake 
Little, — there  he  goes  across  the  street, — he'll  scratch 
a  poor  man's  head  before  he  dies,  and  you'll  have  to 
bury  him  by  subscription." 

"Isn't  Drew  selling  it?"  inquired  a  subdued  look- 
ing operator,  who  had  listened  with  a  sickly  smile  to 
the  whole  conversation. 

"Drew  selling  Erie  at  4?"  almost  shrieked  the 
General.  "  Daniel  Drew  doesn't  sell  stocks  when  they 
are  low ;  he  sells  'em  when  they  are  way  up,  and  you 
boys  are  crazy  to  buy  'em  then,  and  he  sells  'em  to 
you  when  you  cry  for  'em.  That  thousand  shares 
you  see  in  these  ten  certificates,  I'm  going  to  sell  'em 
at  par,  not  one  cent  short  of  100,"  reiterated  he, 
"  and  when  it  sells  at  par  you'll  see  me  back  here — 
not  before,"  and  he  turned  on  his  heel  and  walked 
up  the  street.  Different  opinions  were  now  expressed 
by  his  late  audience  as  to  the  soundness  of  these 
views,  but  the  majority  concurred  in  pronouncing  the 
General  a  little  "  touched  "  on  the  subject  of  Erie. 

But  the  more  I  thought  about  these  views,  the 
more  correct  they  appeared.  Here  is  a  veteran  in 
the  market,  who  is  willing  to  buy  Erie  at  4,  and  hold 
it.  If  it  goes  down  to  zero,  a  man  can  only  lose  four 


DANIEL   SAYS   UP,  AND   DANIEL   SAYS   DOWN.     141 

per  cent.,  which  he  may  lose  any  time  by  speculation. 
I  invested  in  a  few  days,  $400  in  100  shares  of  Erie 
at  4,  laid  it  away  in  a  snug  place  and  watched  for  the 
tide  to  turn.  Slowly  it  rose,  but  it  rose  !  In  thirty 
days  it  sold, at  8;  in  sixty  days  it  sold  at  10. 

Daniel  Drew,  in  1859,  and  for  eight  years  after- 
wards, was  chief  director,  high  comptroller  and  pur- 
veyor, and  head  broker  of  the  Erie  Railway  Company. 
Nothing  in  the  conduct  of  the  road  escaped  his 
surveillance.  Every  increase  or  diminution  in  the 
monthly  earnings  was  known  to  him  beforehand. 
He  knew  exactly  where  to  place  his  finger  on  the 
stock  circulating  in  the  market,  and  how  much  to  a 
share  was  held  abroad.  Every  movement  in  the 
price  of  the  stock  produced  by  any  operator  or  com- 
binatloii  of  operators,  he  watched  with  a  jealous  eye 
and  often  thwarted  it.  Knowledge  is  power.  But 
his  power  over  Erie  was  not  derived  simply  from 
knowledge.  The  Erie  Railway  Company  was  poor, 
it  must  have  money,  or  go  into  bankruptcy.  Drew 
advanced  them  money.  He  cashed  their  drafts  and 
indorsed  their  acceptances,  but  he  always  took  secu- 
rity, sometimes  in  the  form  of  bonds,  convertible  into 
stock,  sometimes  in  the  form,  more  useful  to  him,  of 
a  chattel  mortgage  on  their  rolling-stock.  The  bor- 
rower is  the  servant  of  the  lender.  Drew,  during 
these  years,  held  the  Erie  Railway  Company  in  the 
hollow  of  his  hand. 

When  it  was  for  his  interest  that  the  price  of  the 
stock  should  decline,  he  closed  his  hand  and  it  fell. 
When  it  was  for  his  interest  that  the  price  should  rise, 
he  opened  his  hand  and  it  rose.  If  the  company  failed 
to  meet  their  obligations  to  him,  straightway  a  report 


142  IXSIDE    LIFE   IN  WALL  STREET. 

was  spread  through  the  market  that  Drew  was  about 
to  foreclose  the  chattel  mortgage,  and  then  came  a  de- 
pression, but  mysteriously  enough,  these  depressions 
occurred  when  Drew  was  short  of  the  stock,  and  the 
corresponding  rises  took  place  when  he  had  bought 
the  stock  at  the  depressed  price. 

His  power  over  the  stock-price  was  almost  unac- 
countable even  in  view  of  these  causes.  It  rose  and 
fell  as  if  upon  the  waving  of  a  wizard's  wand. 
"Daniel  says  up!"  and  up  it  rose.  "Daniel  says 
down!"  and  down  it  was.  "Daniel  says  wiggle- 
waggle  ! "  and  it  bobbed  to  and  fro  in  a  small  arc  of 
two  per  cent. 

From  December,  1859,  till  March,  1860,  Erie  vi- 
brated languidly  between  8  and  10.  Then  it  started 
up  in  good  earnest.  "What's  going  on  in  the  stock? " 
was  the  inquiry  around  the  board.  The  public  ridi- 
culed the  movement.  "A  perfect  bubble!"  cried 
some.  "Not  worth  the  paper  its  written  on,"  as- 
serted others.  "  Sell  it  short,  and  you'll  make  your 
fortune!"  and  they  did  sell  it  short  with  a  right 
good  will.  Panic-bitten  bankers,  incredulous  mer- 
chants, conservative  stockdealers,  all  took  a  flyer, 
large  or  small,  on  the  short  side.  Month  after  month, 
the  stock  kept  rising  15,  25,  30.  Drew,  and  his  asso- 
ciates, held  a  vast  block  of  it,  counting  the  number 
of  shares,  and  the  short  contracts,  and  when  it  be- 
came generally  known,  that  Erie's  financial  troubles 
were  over,  that  the  lawsuits  were  settled,  and  the 
earnings  increasing,  their  grip  tightened.  Still  the 
price  kept  rising,  32,  35,  38,  40,  and  on  the  2d  of 
October,  it  reached  its  culmination,  421.  The  ma- 
jority of  the  bears  having  covered  their  contracts, 


PROFIT   IN   STOCKS.  143 

the  corner  collapsed,  the  price  fell  back  to  25,  and 
dullness  resumed  her  "ancient  melancholy  reign" 
over  the  market.  My  100  shares  bought  at  4,  were 
sold  at  40  £,  showing  a  profit  of  $3,600. 

This  buying  of  stocks,  and  paying  for  them,  is  the 
true  policy  to  be  pursued  by  an  outsider,  and  believe 
me,  ye  novices,  if  you  wish  to  elude  the  traps,  bid 
defiance  to  the  corners,  and  gaze  serenely  on  the 
panics  of  Wall  Street,  then  buy  only  what  you  can 
pay  for,  and  afford  to  keep,  and  expect  in  due  time 
your  increase. 


CHAPTER 

WAR  TIMES  AND  GREENBACKS. 

One  Little  Cloud  in  a  Fair  Sky  —  Business  Lively,  and  Crops  coming  in 
while  a  Thunder-storm  is  Brewing  —  The  Cloud  Gathers  and  Bursts 
—  Stocks  Fall  Down  and  "Take  a  Snooze"  —  New  Fields  for  the 
Speculator  —  The  Fortune  of  a  Chemist,  and  How  he  Transmuted 
Saltpetre  into  Gold  —  The  Parentage  of  the  Greenback  Currency  — 
Wake  Up,  Wall  Street!—  The  Stimulant  Begins  to  Work—  Music 
by  the  Whole  Band!  —  Stocks  on  the  Rampage  —  The  Under-ground 
Telegraph  Clicking—  News  from  the  Front—  The  Bulls  Fall  Back, 
but  Reorganize  and  Prepare  to  Charge  Again  —  An  Army  Without  a 
Leader. 


in  1860,  arose  in  the  political  sky  a 
cloud,  at  first,  no  larger  than  a  man's  hand. 
Every  one  saw  it,  but  not  so  many  looked  at 
it  with  apprehension. 

The  financial  prospect  had  never  been  so  bright. 
The  country  had  fairly  recovered  from  the  revulsion 
of  '57.  The  banking  system  reorganized  and  strength- 
ened, gave  every  facilitj^  to  the  expansion  of  legiti- 
mate enterprise.  Commerce  was  widening,  and  man- 
ufactures were  multiplying.  The  largest  crops  ever 
known  before  were  that  year  gathered.  Four  million 
bales  of  cotton  were  piled  in  the  warehouses,  and 
more  than  fifteen  hundred  millions  of  bushels  of 
wheat,  corn,  oats,  rye  and  other  cereals  had  been 
garnered  from  the  harvest.  All  the  remaining  prod- 
ucts were  in  similar  proportions. 


DULL    TIMES.  145 

Here  was  solid  wealth.  Here  was  the  means  to 
pay  our  foreign  debt,  and  the  material  for  an  immense 
carrying-trade  on  the  ocean  between  America  and 
other  countries,  and  for  a  transportation  still  more 
immense  on  the  railways. 

The  speculative  public  were  looking  forward  to 
another  era  of  inflation  and  of  corresponding  oppor- 
tunities for  profit  in  the  stock  market.  And  with 
reason.  The  amount  of  business  done  on  the  rail- 
ways reflects  the  industrial  activities  of  the  country. 
The  rises  of  stock  which  take  place  in  Wall  Street 
are  not  all  the  result  of  mere  speculation.  Behind 
all  these  movements  lies  the  fact  of  intrinsic  values 
always  operating  with  a  silent  but  mighty  force. 
"Freight  is  the  mother  of  wages."  This  maxim  of 
admiralty  law  is  as  true  of  railroad  trains  as  it  is  of 
sea-going  vessels.  The  balance  sheet  of  the  earnings 
of  railways  is  a  mirror  of  the  industries  and  products 
of  the  land.  In  it  we  can  seem  to  see  reflected,  piles 
of  cotton  bales  and  stacks  of  corn  and  wheat,  hogs- 
heads of  sugar  and  tobacco,  herds  of  cattle,. flocks  of 
sheep  and  droves  of  swine,  and  a  busy  host  of  men 
working  in  mine  and  mill,  for  the  scream  of  the  loco- 
motive is  ever  the  shrillest  and  most  frequent  when 
the  furnace,  forge  and  factory  roar  the  loudest. 

But  the  hopes  of  the  speculators  were  not  yet  to 
be  realized.  The  little  cloud  within  sixty  days  after 
the  election  of  Abraham  Lincoln  was  announced,  had 
gathered  blackness  and  swelled  into  a  thunder-cumu- 
lus which  overspread  the  southern  sky  and  threw  its 
gigantic  shadow  as  far  north  as  the  St.  Lawrence. 
Such  a  season  as  this  had  never  been  known  before. 
Panics  of  every  description  had  occurred,  except  that 


146  INSIDE    LIFE  IN   WALL   STREET. 

growing  out  of  a  political  complication  so  embarrass- 
ing and  aggravated  as  this.  And  yet,  dark  as  the 
prospect  was,  the  stock-operators,  always  sanguine  of 
temperament,  after  a  few  weeks  began  to  gather 
courage,  and  many  capitalists  were  found,  particu- 
larly in  New  England,  who,  tempted  by  the  low  prices, 
were  bold  enough  to  put  their  money  in  cash  stock, 
for  permanent  investment.  A  long  continued  dull 
spell  in  Wall  Street  is  the  particular  abhorrence  of 
the  broker,  and  if  any  one  who  was  afflicted  by  the 
prevailing  gloom,  wished  to  derive  comfort  for  the 
future,  he  had  only  to  visit  the  Stock  Exchange  and 
listen  to  the  hopeful  prognostications  which  he  would 
be  sure  to  hear  on  every  side. 

The  roar  of  the  cannonade  at  Fort  Sumter  speedily 
dispelled  these  illusions.  In  three  days  thirteen  of 
the  leading  stocks  dropped  an  average  of  twenty  per 
cent.  Government  Fives  fell  to  75,  Sixes  to  84,  and 
the  bonds  of  the  seceded  States  slumped  thirty  per 
cent.  After  panic  came  dullness. 

The  few  outsiders,  who  had  for  months  been  flut- 
tering around  the  stock  exchange,  now  took  wing, 
and  the  brokers  were  left  for  a  time  to  their  own  de- 
vices. The  market  was  suffering  under  that  con- 
dition known  as  the  "dry  rot."  Money  was  abun- 
dant, but  there  was  little  "disposish,"  to  use  the 
Wall  Street  slang,  to  buy  or  sell.  Months  rolled  by, 
and  this  condition  seemed  to  have  become  chronic. 
It  was  part  and  parcel  of  the  condition,  which  af- 
fected the  entire  country. 

The  same  cannonade,  "  that  deep  and  dreadful 
organ-pipe  of  war,"  which  had  reverberated  through 
the  Stock  Exchange,  and  stunned  its  inmates  into  a 


A   CHEMIST   DISSOLVES    A   MAEGIN.  147 

lethargy,  seemed  to  have  lulled  into  a  fitful  slumber, 
a  large  portion  of  the  commercial  and  other  business 
enterprises  of  the  republic.  Looms  and  anvils  were 
still,  wharves  were  silent,  and  vessels  lay  rotting  at 
anchor,  on  sea,  river,  and  lake. 

But,  while  legitimate  trade  seemed  almost  dead, 
new  and  abnormal  forms  of  traffic  arose.  Army-uni- 
forms, shoes,  bunting,  haversacks,  arms,  munitions, 
and  deep-throated  engines  of  war,  were  suddenly  in 
demand.  Cotton-mills  were  turned  into  rifle-factories. 
The  steam-derrick  hoisted  rifled-cannon,  the  trip- 
hammer forged  the  shaft  of  the  war-steamer,  and  the 
peaceful  foundry  poured  forth  shot  and  shell  in  pyra- 
mids. 

War  had  thus  opened  new  fields  for  the  energies 
of  the  stock-operators.  A  few  of  them  enlisted,  and 
went  to  the  front,  to  engage  in  struggles  and  strata- 
gems, for  which  they  had  been  educated,  by  their  cam- 
paigns in  Wall  Street.  Some  became  sutlers.  Some 
bought  old  hulks,  and  sold  them  to  the  Government, 
and  some  haggled  in  army  contracts.  Most  of  them 
made  money,  with  which  they  returned  in  1862,  to 
ply  their  ancient  trade,  in  the  stock-market. 

One  of  these  speculators,  in  munitions  of  war,  was 
B.,  a  chemist,  who  had  a  small  laboratory,  in  Jersey 
City.  He  experimented  in  the  reduction  of  metals, 
and  furnished  certificates  of  the  richness  of  the 
specimens  of  the  ores  submitted  to  him  by  mining 
companies.  Why  is  it  that  so  many  chemists  are 
found  among  the  buyers  and  sellers  of  stocks  ?  Per- 
haps it  is  because  the  followers  of  the  science  of 
chemistry  are  naturally  given  to  the  speculative  pur- 
suit of  gold  under  difficulties.  Witness  the  old  al- 


148  INSIDE    LIFE  IN   WALL    STREET. 

chemists,  who  sought  to  transmute  baser  into  precious 
metals ;  or,  it  may  be  they  are  brought  into  the  stock- 
market,  by  their  connection  with  mining  companies, 
whose  ores  they  assay  and  certify  to.  Certain  it  is, 
they  may  be  frequently  seen  among  the  busy  crowd 
in  Broad  Street. 

B.,  had  for  many  years  supported  himself,  and 
earned  something  more  by  his  profession ;  but  all  his 
surplus  income  went  to  pay  his  losses  and  commissions, 
in  the  purchase  and  sale  of  stocks.  He  could  have  been 
seen  almost  every  day,  from  twelve  to  two,  standing 
in  the  tunnel-entrance  to  the  regular  board,  bearded 
like  a  dervish,  his  countenance  "  sicklied  o'er  with  the 
pale  cast  of  thought,"  or  with  the  unwholesome  fumes 
of  his  trade,  waiting  for  the  tide  to  turn  in  his  favor. 
The  tide  never  did  turn,  but  kept  ebbing,  and  finally 
left  him  high  and  dry  on  the  beach. 

Just  before  the  panic  which  followed  the  bombard- 
ment and  fall  of  Sumter,  he  had  mortgaged  his 
laboratory,  chemicals  and  retorts  to  his  broker  and 
staked  the  proceeds  in  a  margin  on  Border  State 
Bonds.  In  less  than  two  weeks  his  money  was  gone, 
and  his  broker's  account  showed  him  in  debt  $2,500, 
besides  the  mortgage  of  $1,000  which  he  owed.  He 
therefore  went  back  to  his  profession,  and  in  six 
months  had  cleared  $1,200.  This  sum  would  pay 
off  the  mortgage  which  fell  due  on  the  1st  of  Janu- 
ary, 1862,  and  save  him  from  absolute  ruin. 

About  the  first  of  December  he  received  proposals 
to  go  into  the  manufacture  of  saltpetre  for  making 
gunpowder,  in  partnership  with  a  wealthy  capitalist. 
The  basis  on  which  the  expectation  of  great  profits 
was  founded,  was  the  low  price  of  nitrate  of  soda, 


AN   EXPLOSION    OF    SALTPETRE.  149 

which  is  one  of  the  principal  materials  out  of  which 
saltpetre  is  made.  This  fact  was  enlarged  upon,  and 
also  that  nearly  the  whole  stock  of  nitrate  of  soda 
(four  million  pounds),  then  on  hand,  was  held  by  two 
firms,  and  had  been  bespoken  by  the  capitalist  wTho 
furnished  this  information. 

B.  suddenly  recollected  that  a  friend  in  the  busi- 
ness of  manufacturing  chemicals,  had  bought  some 
months  before,  four  hundred  thousand  pounds  of 
nitrate  of  soda,  with  the  view  to  make  it  into  salt- 
petre, but  had  given  up  the  purpose  and  had  offered 
to  sell  it  to  him,  B.,  for  two  and  a  half  cents  a  pound. 

"What  is  the  price  of  nitrate  of  soda?"  inquired  B. 
of  the  capitalist  with  whom  he  was  negotiating. 

"  Three  cents  a  pound,"  replied  he. 

No  conclusion  was  arrived  at  respecting  the  pro- 
posed business,  but  that  afternoon  B.  called  on  the 
chemical  manufacturer,  who  sold  him  the  lot  (400,000 
pounds),  at  two  and  a  half  cents  per  pound,  ten  per 
cent,  of  the  purchase  money  payable  cash  down,  the 
balance  in  thirty  days.  This  operation  stood  thus: 

400,000  Ibs.  nitrate  of  soda  at  two  and  a  half  cts.  per  lb.,  .  $10,000 
Paid  cash  on  ace., 1,000 

Due  from  B.,  payable  in  30  days, $9,000 

The  next  week  was  spent  by  B.  in  trying  to  work 
off  his  purchase  at  an  advance  over  what  he  gave, 
but  dealers  would  only  buy  at  2£.  B.  began  to  feel 
blue. 

The  news  now  came  of  the  seizure  of  Mason  and 
Slidell.  The  fear  of  trouble  with  England  followed, 
and  "villainous  saltpetre,"  otherwise  nitrate  of  soda, 
began  to  look  up  in  the  market. 


150  INSIDE   LIFE  IN   WALL    STEEET. 

Two  or  three  weeks  after  this,  while  B.  was  sitting 
in  his  laboratory,  one  of  the  parties  to  whom  he  had 
offered  the  nitrate  of  soda  at  three  cents,  came  in 
and  offered  three  and  a  half  cents  a  pound,  and  when 
his  offer  was  refused,  advanced  it  to  four  and  then  to 
five  cents. 

"  What's  got  into  the  market  ? "  inquired  B. 

"  Haven't  you  seen  Queen  Victoria's  proclamation 
just  received,  prohibiting  the  exportation  of  arms, 
saltpetre,  nitrate  of  soda,  etc.?"  replied  his  customer. 
"Now  then,  B.,  talk  business,  at  what  price  will  you 
sell  your  nitrate  of  soda?" 

"Six  cents  a  pound,  nothing  less,"  returned  B. 

"I'll  take  it  at  six  cents,  and  send  you  a  check 
to-morrow,  or  as  soon  as  we  receive  the  stuff." 

The  bargain  thus  struck,  netted  B.  a  profit  of 
$14,000.  This  sum  he  used  as  a  five  per  cent,  mar- 
gin, to  purchase  U.  S.  Sixes,  of  which,  he  bought 
$252,000  at  90,  and  in  six  months  sold  them  out  at 
a  net  profit  of  $30,000.  Six  months  after  this  he 
was  at  work  at  his  old  profession,  with  nothing  left 
but  his  laboratory  with  which  to  win  his  bread.  Such 
are  the  vicissitudes  of  a  speculator's  life. 

A  new  cycle  was  soon  to  commence  in  American 
finance,  and  a  new  chapter  to  be  written  in  the  his- 
tory of  speculation.  The  people  had  pledged  their 
sons  to  the  Government,  and  five  hundred  thousand 
soldiers  were  in  arms;  the  Government  must  pledge 
its  credit  to  the  people,  to  raise  money  to  sustain 
that  army.  The  money  must  be  in  the  form  of 
promises  to  pay,  for  hard  currency  was  not  to  be  had, 
the  faith  of  the  Government  must  be  pledged  upon 
the  face  of  it,  and  it  must  have  the  chief  attribute 


CELEBRITIES  OF  WALL  STREET. 


A   SPRING   FRESHET   OF    GREENBACKS.  153 

of  gold,  viz:  the  power  of  extinguishing  debts.    Thus 
arose  the  Legal  Tenders. 

The  credit,  (or  as  some  would  say,  the  discredit,) 
of  originating  the  Legal  Tender,  or  as  it  is  generally 
called  the  greenback  currency,  is  usually  given  to 
Salmon  P.  Chase ;  but  the  parentage  of  this  ingenious 
monetary  device,  is  also  claimed  by  a  tall  man,  named 
P.,  with  an  eye  like  a  squab,  and  a  pendulous  nether 
lip,  not  unknown  to  the  purlieus  of  the  lobby.  It 
has  been  asserted,  that  he  first  suggested  the  plan  to 
President  Lincoln,  some  time  in  the  summer  of  1861. 
However,  this  may  be  the  plan  was  agitated  in  finan- 
cial councils,  during  the  last  two  months  of  1861. 
In  February,  1862,  after  due  deliberation,  Congress 
passed  the  Legal  Tender  Act,  authorizing  the  issue 
by  the  Government,  of  $150,000,000,  in  United  States 
notes,  thus,  nearly  doubling  at  one  stroke,  the  money 
circulation  of  the  country. 

Strange  to  relate,  Wall  Street  failed  to  appreciate, 
with  its  usual  quickness,  the  significance  of  this  Legis- 
lative enactment.  During  the  past  twelve  months, 
there  had  been,  with  few  exceptions,  no  lack  of  money 
for  speculative  purposes  in  the  stock-market.  What 
was  lacking  then  ?  Confidence  in  the  future. 

During  all  that  chronic  dullness  on  the  street, 
whereof  we  have  spoken,  there  hardly  occurred  one 
notable  movement,  excepting  an  occasional  sharp  rise 
or  decline  in  Border  State  Bonds.  Brokers  and  oper- 
ators, alike,  had  become  so  habituated  to  this  le- 
thargic condition  of  things,  that,  for  more  than  two 
months  after  the  passage  of  the  bill,  they  seemed  to 
desire  or  strive  after  no  other. 

The  new  currency  began  to  be  seen  in  the  Ex- 
10 


154  INSIDE    LIFE  IN   WALL    STREET. 

change  brokers'  offices,  early  in  April,  first  in  large 
notes  of  $1,000,  then  of  $500.  In  a  fortnight^  it  was 
coming  on  in  sums  counted  by  the  million.  The 
American  and  National  Bank-Note  Companies,  who 
did  the  engraving  and  printing  for  the  Government, 
in  New  York,  sent  the  notes  on  to  Washington.  From 
Washington,  they  came  back  to  the  sub-treasury, 
in  New  York,  by  the  express-wagon  load,  in  boxes, 
and  in  bags,  but  generally  done  up  in  packages,  the 
size  of  small  bricks,  in  brown  paper,  tied  with  red 
tape,  sealed  with  the  treasury  seal,  and  numbered 
and  marked;  at  the  sub-treasury,  they  were  paid 
out  by  Mr.  John  J.  Cisco,  the  sub-treasurer.  Still,  the 
stock-market  was  as  sluggish  as  ever.  The  enormous 
issue  of  paper-money  inspired  alarm,  instead  of  stimu- 
lating speculation ;  and  large  sums,  instead  of  going 
into  stocks,  were  deposited  with  the  sub-treasurer, 
at  five  per  cent  interest. 

Suddenly,  as  if  by  magic,  on  the  closing  days  of 
April,  the  feeling  changed.  The  stimulant,  whose 
virtues  the  drowsy  brokers  refused  to  believe  in,  be- 
gan to  work  most  potently.  The  stocks  which  had  so 
long  lain  still,  now  like  so  many  puppets  strung  on  a 
wire,  pulled  by  an  unseen  hand,  danced  upwards, 
according  to  their  kind.  First  came  Government 
Sixes,  which  had  stood  at  about  93  for  many  months ; 
on  the  third  of  May  they  touched  par,  amid  loud 
cheers  in  the  broker's  board.  -  Bank  stocks,  the  value 
of  which  was  interlaced  with  that  of  Governments, 
which  the  banks  held  so  largely,  rose  next.  Then 
came  the  soundest  dividend  paying  securities  among 
railway  bonds  and  stocks.  After  which  the  doubtful 
stocks  came  limping  and  halting  upwards.  But  all 


AN  OCEAN  OF  GREENBACKS.         155 

moved  up  in  steps,  measured  some  by  five,  and  others 
by  one  per  cent. 

In  most  of  the  great  rises  in  Wall  Street,  this  order 
is  maintained.  The  stocks  most  highly  esteemed 
lead  off  in  the  rise,  and  the  others  follow  in  the  rank 
of  estimation  in  which  they  are  held  by  the  brokers 
or  the  public,  the  worthless  fancies  bringing  up  the 
rear  like  the  rag-tag  and  bobtail  of  an  army.  This 
order,  however,  is  often  varied  by  the  artificial  move- 
ments produced  by  combinations  which  take  hold  of 
these  same  worthless  fancies  and  make  one  or  more 
of  them  the  most  remarkable  features  in  a  general 
rise. 

The  speculation  promised  in  1860,  and  postponed 
till  now,  had  commenced;  and  it  was  sustained  by 
something  more  than  merely  the  abundance  of  money 
offered  at  a  low  rate  in  the  market  place.  The  same 
mighty  force  of  intrinsic  values,  of  which  we  have 
already  spoken,  lay  behind  it.  The  new  circulating 
notes  passing  through  the  country,  seemed  like  the 
kiss  of  the  prince  on  the  cheek  of  the  sleep-enchanted 
lady  in  the  fairy  tale,  to  awaken  to  newness  of  life 
the  myriapl  shapes  of  industry.  The  music  of  re- 
warded labor  was  heard  in  fuller  tones  through  the 
land.  Spindles  hummed,  wheels  buzzed,  hammers 
clanged,  and  the  giant  brood  of  agriculture  and  the 
useful  arts  awoke  from  their  slumber. 

The  earnings  of  the  railways  were  discovered  to 
be  larger  than  ever  before.  The  volume  of  business 
which  they  did,  kept  pace  with  the  increased  produc- 
tion, stimulated  by  the  enhanced  value  of  the  raw 
material,  so  wonderfully  do  the  subtle  fluids  which 
stimulate  the  limbs  of  industry,  gather  new  force. 


156  INSIDE    LIFE  IN   WALL    STREET. 

acting  and  reacting  on  each  other,  like  positive  and 
negative  electricity.  It  should  not  be  forgotten,  also, 
that  this  general  increase  in  values,  together  with  the 
stoppage  of  the  Mississippi  artery,  justified  higher 
rates  of  transportation. 

The  peninsular  campaign  was  progressing  favora- 
bly, and  this  gave  courage  to  the  Wall  Street  men. 
Here  it  should  be  noted  that  early  in  the  war,  Union 
successes  were  used  as  arguments  in  favor  of  a  rise 
in  stocks,  but  as  the  war  went  on,  Union  defeats  were 
used  as  arguments  in  favor  of  a  rise.  This  was  cor- 
rect reasoning  in  both  cases,  for  up  to  a  certain  point 
of  time  the  cessation  of  hostilities  would  have  en- 
abled the  country  to  recover  the  old  channels  of 
business,  but  after  that  point  of  time  the  continuance 
of  the  war  produced  permanent  devastation  and  de- 
rangement, and  became  associated  with  the  idea  of 
increased  issues  of  paper  money  to  be  redeemed  only 
at  the  end  of  the  war. 

While  McClellan  and  his  grand  army  was  pushing 
past  Yorktown  and  Williamsburg,  and  enveloping 
Richmond  between  his  right  and  left  wings,  stocks 
kept  advancing,  and  the  speculators  began  to  flock 
into  the  stock-market  from  all  quarters.  Rings  were 
formed  which  purposed  to  send  stocks  up  with  a  rush 
when  the  grand  army  should  march  into  Richmond. 

In  the  latter  part  of  June,  while,  to  the  general 
public,  everything  seemed  bright  and  promising  at 
the  front,  stocks,  to  the  astonishment  of  the  unini- 
tiated, suddenly  dropped  heavily.  Why  was  this  ? 
We  may  explain  it  thus : 

Early  in  May,  1862,  a  plan  had  been  devised  by 
leading  brokers  and  operators,  by  which,  the  earliest 


THE  MCCLELLAN  CAMPAIGN  IN  WALL  STREET.    157 

information  could  be  obtained  from  the  front.  Often, 
before  it  was  known  to  the  Government,  a  fact  would 
be  communicated  to  the  Wall  Street  magnate,  and 
acted  upon.  By  watching  the  financial  mercury  tube 
on  the  Stock  Exchange,  a  shrewd  observer  could  not 
unfrequently  predict  the  news  of  a  victory  or  a  de- 
feat, simply  by  noticing  the  rise  and  fall  of  stocks. 
The  system  consisted  in  giving  those  at  the  front,  who 
gathered  and  transmitted  the  information,  a  certain 
interest  in  stocks,  and  thus  stimulating  them  to  every 
exertion  to  forward  early  news.  Sometimes  the  tele- 
graph lines  were  subsidized,  and  the  most  liberal  sums 
were  paid  for  reliable  intelligence  in  advance.  Offi- 
cers, soldiers,  sutlers,  politicians,  lobbymen,  and  high 
officials  of  the  Government  were  employed  to  keep 
the  Wall  Street  operators  thoroughly  posted,  as  to 
when  to  buy  and  when  to  sell.  This  system  was 
afterwards  still  more  completely  organized  by  the 
gold  speculators,  as  we  shall  hereafter  see. 

News  had  been  received  through  the  medium 
above  mentioned,  which  justified  the  belief  that  the 
McClellan  campaign  would  fail  to  accomplish  its 
object,  then  that  it  had  fallen  back,  and  finally  that 
the  President  was  about  to  call  for  three  hundred 
thousand  more  men  to  prosecute  the  war.  This  news 
was  interpreted  to  be  unfavorable  to  the  upward 
movement  in  the  price  of  stocks,  and  so  prices  fell, 
and  drooped  for  thirty  days. 

In  July,  an  increase  of  the  greenback  issue  waa 
authorized  to  the  extent  of  $300,000,000.  The 
notes  of  this  new  issue  soon  appeared  in  their  fresh- 
est gloss  in  the  sub-treasury,  in  brokers'  windows,  in 
the  merchants'  petty  cash-box,  and  in  farmers'  greasy 


158  INSIDE    LIFE  IN   WALL    STKEET. 

old  wallets.  The  stream  taking  its  rise  in  the  treas- 
ury building,  flowed  on,  widening  to  a  mighty  river, 
and  like  the  flood  of  Old  Nile,  overflowing,  if  not 
fertilizing  the  country. 

Money  could  soon  be  had  at  three  per  cent., 
on  call,  in  the  market.  Once  more  the  watchful 
operators  loaded  up.  In  September  there  again  oc- 
curred the  same  quivering,  saltatory,  upward  move- 
ment, that  had  taken  place  early  in  May.  "  Courage, 
Bulls!"  passed  from  rank  to  rank.  "Load  up!  load 
up!"  was  the  cry.  And  for  the  first  time,  those 
stocks  which  were  then  called  the  "fancies,"  began  to 
move.  Erie  and  Harlem  were  looking  up. 

Something  was  still  wanting  to  the  market.  Stocks 
were  cheap,  money  plentiful, '  and  hope  buoyant. 
What,  then,  was  lacking?  Some  one  bold  enough 
to  bid  stocks  up.  The  market  demanded  leaders, 
and  straightway  leaders  came  forth. 


CHAPTER 
BULL-LEADERS. 

"Circumstances  Make  Men" — Addison  G.Jerome — The  Napoleon  of 
the  Public  Board — His  Appearance,  Character  and  Fortunes — His 
Fall  from  Power— John  M.  Tobin,  the  Wall  Street  Sea-rover — 
Style  and  Policy  of  his  Operations— Vanderbilt's  Lieutenant — New 
School  of  Tactics  in  the  Stock-market — Composition  of  the  Public 
Board — Fortunes  of  some  of  its  Members  —  A  Bankrupt  turns 
Banker — The  Luck  of  a  "Bummer  and  Dead  Beat" — The  Story 

of  D y— Forward  Bulls!— Stocks  on  the  March— My  First  Visit 

to  the  Public  Board,  and  what  came  of  it. 

>ARS  bring  forth  generals;  and  revolutions, 
statesmen.  Times  of  financial  excitement 
in  the  stock-market  develop  skill  and  ability 
in  that  field,  and  bring  forth  what  are  termed  Bull- 
leaders,  Wall  Street,  considered  as  an  aggregation  of 
human-forces  and  money-forces,  without  bull-leaders, 
would  be  like  a  flock  of  sheep  without  a  bell-wether, 
a  mob  without  a  spokesman,  an  army  without  a  com- 
mander. It  is  the  bull-leader  who  organizes  and 
compacts  those  forces,  brings  them  under  his  banner 
and  leads  them  to  victory  or — ruin. 

He  must,  of  course,  have  or  control  large  sums  of 
money,  and  be  distinguished  for  clearness  of  percep- 
tion and  promptness  of  decision,  but  above  all,  he 
must  have  more  nerve,  than  falls  to  the  lot  of  com- 
mon humanity. 

This  word  nerve,  in  Wall  Street,  covers  and  includes 


160  INSIDE    LIFE  IN   WALL    STEEET. 

much.  By  it  is  signified  courage  as  an  active  quality, 
and  fortitude  as  a  passive  quality,  a  firmness  of  bodily 
fibre  and  an  equal  firmness  of  will,  a  capability  for 
enduring  "punishment,"  as  is  said  of  some  pugilists, 
and  the  strength  to  inflict  it.  It  is  the  same  quality 
that  enables  the  gambler  to  "bluff"  the  table  and 
take  the  "pool^'  of  money  though  some  of  the 
other  players  may  hold  a  better  hand  than  he,  and 
what,  after  all,  is  the  game  of  speculation,  but  a 
big  game  of  bluff  in  which  Vanderbilt,  Drew  and 
the  other  heavy-weighted  players  take  the  whole 
pot  of  money  staked  by  a  hundred  less  skillful  and 
nervy. 

Such  a  man  as  we  have  described,  was  Addison  G. 
Jerome,  during  his  brief  reign  of  nine  months,  as  the 
"Napoleon  of  the  Public  Board."  He  was  formerly 
of  Rochester,  N.  Y.,  and  previous  to  going  into  Wall 
Street,  had  been  a  dry  goods  merchant  in  the  city 
of  New  York,  and  we  believe  successful  in  that  voca- 
tion. Merchandising  and  broking,  are  contiguous  pro- 
fessions ;  the  latter  being  an  extension  and  intensifi- 
cation of  the  idea  of  traffic,  for  the  broker  buys  and 
Bells,  both  much  oftener  and  much  more  heavily  than 
the  merchant,  of  the  same  grade. 

He  was  a  middle-sized,  quiet-loooking  man,  with  a 
bluish  gray  eye,  and  a  slight  stoop.  When  he  rose  to 
bid  for  a  stock  in  the  Public  Board,  every  eye  was  fixed 
upon  him,  and  his  gestures,  and  the  expression  of  his 
face  were  studied,  even  while  he  was  sitting  down, 
during  the  call  of  stocks.  The  spring  of  1863,  found 
him  master  of  a  large  personal  fortune,  and  his  pres- 
tige in  the  market,  brought  to  his  banking-house,  im- 
mense deposits,  from  those  who  believed  in  his  finan- 


A.    G.  JEROME    AXD    HIS    FORTUNES.  161 

cial  star.  He  organized,  and  carried  through,  some 
of  the  most  successful  corners  of  the  year. 

Mr.  Jerome's  associates  in  the  Board  followed  his 
lead,  with  a  blind  confidence,  that  savored  of  infatu- 
ation, and  too  often  with  disastrous  results  to  them- 
selves, for  he  used  his  power  most  skillfully,  when 
necessary  for  the  success  of  some  pet  scheme,  to  mis- 
lead or  hoodwink  the  uninitiated.  We  remember 
hearing  him  remark  to  a  friend,  "now  see  me  fool 
the  boys,"  (this  was  in  the  street  after  tne  expiration 
of  the  session.)  He  thereupon,  offered  to  sell  any 
part  of  fifteen  thousand  shares  of  Galena ;  the  brokers 
around  him  thinking  this  only  a  bluff  offer  to  depress 
the  stock,  eagerly  caught  him  up,  and  in  fifteen 
minutes  he  sold  the  whole  fifteen  thousand  shares  to 
different  parties.  Next  morning  the  stock  fell  ten 
per  cent,  and  he  re-purchased,  before  night,  the  en- 
tire lot,  bagging  something  like  one  hundred  and 
twenty-five  thousand  by  the  operation. 

Unlike  many  large  operators,  whose  hearts  are  like 
the  nether  millstone,  knowing  neither  "ruth  nor 
pity,"  he  was  open  to  generosity,  and  the  softer 
emotions.  His  treatment  of  fallen  antagonists  was 
liberal,  and  even  magnanimous.  Not  unfrequently 
he  allowed  some  of  his  outside  friends  to  participate 
in  the  profits  of  some  one  of  the  numerous  rings  he 

controlled.  In  1863,  he  called  on  H.  L.  D ,  a 

large  and  successful  operator,  but  whose  painful  lame- 
ness prevented  him  from  being  in  the  market,  and 
told  him  to  take  a  few  thousand  shares  of  a  certain 
stock,  in  which  he  had  a  controlling  interest.  He 
did  so,  and  in  three  days  he  drew  out  of  Jerome's 
hands,  a  profit  of  sixty  thousand  dollars.  Nearly 


162  INSIDE   LIFE  IN"  WALL   STREET. 

every  stock  on  the  list  (including  gold,)  first  or  last 
during  his  nine  months  reign,  responded  to  his  touch. 

When  he  formed  a  ring,  he  was  in  the  habit  of 
assigning  a  certain  interest  to  Mrs.  Jerome,  his  wife, 
doubtless  in  view  of  the  uncertainties  of  Wall  Street. 
He  always  seems  to  have  inspired  his  associates  in 
these  rings,  with  the  same  confidence  which  he  him- 
self felt,  or  seemed  to  feel,  and  if  a  disaster  occurred, 
he  was  wont  to  keep  up  their  courage,  by  pointing 
to  the  ease  with  which  stocks  could  be  manipulated, 
and  the  great  profits  to  be  earned  thereby. 

But  nearly  all  our  Wall  Street  necromancers  meet, 
at  last,  some  master  spirit,  before  whom,  their  strong- 
est spells  become  powerless,  and  their  magic  arts  fail 
them.  Mr.  Jerome,  with  all  his  shrewdness  and  dar- 
ing, formed  no  exception  to  this  rule.  He  met  his 
fate  in  Old  Southern,  at  the  hands  of  Henry  Keep, 
in  August,  1863,  in  the  manner  to  be  hereafter 
described.  His  personal  losses  in  this  stock  on  that 
occasion  are  said  to  have  reached  $800,000,  and  after 
that,  he  ceased  to  be  a  power  in  the  street. 

He  died  in  1864,  of  one  of  those  obscure  diseases 
of  the  heart,  superinduced,  probably,  by  the  excite- 
ments and  pressures  of  Wall  Street  life,  and  left  no 
personal  or  real  estate,  unless  he  may  be  said  to  have 
had  an  interest  in  the  estate  of  several  hundred 
thousand  dollars  which  he  had  settled  upon  his  wife 
in  the  days  of  his  affluence. 

One  of  the  contemporaries  of  A.  G.  Jerome,  who 
first  came  out  prominently  as  a  member  of  the  Pub- 
lic Board,  in  1862,  and  as  a  general  stock-operator, 
was  John  M.  Tobin. 

Tobin  is  an  Anglo-Norman  name.     It  is  a  corrup- 


SKETCH   OP   JOHN"  M.   TOBItf.  163 

tion  of  St.  Aubin.  Some  seven  hundred  years  ago, 
St.  Aubin  was  a  Norman  Baron,  who  accompanied 
Strongbow  to  Ireland,  and  assisted  in  the  subjugation 
of  that  country.  In  John  M.  Tobin's  veins  doubtless 
runs,  then,  the  blood  of  Norman  Barons,  and  of  Irish 
kernes.  He  has  a  spice  of  the  old  Norse  Vikings  about 
him,  and  has  been  a  kind  of  freebooter  on  a  large 
scale.  He  and  Leonard  W.  Jerome  have  together 
plowed  the  main  in  Wall  Street,  and  rifled  and  scut- 
tled many  a  stately  argosy,  and  taken  for  toll  many 
good  ducats  out  of  Uncle  Daniel  Drew's  strong  box. 
All  sorts  of  stories  used  to  float  about  among  the 
gossips  of  the  market,  respecting  his  antecedents. 
He  had  been  a  liquor  dealer  in  Water  Street ;  he  had 
been  employed  on  a  ferry-boat;  he  was  a  returned 
Californian,  etc.,  etc.,  etc.  And  then  as  to  how  he 
started  in  the  street,  some  said  he  put  up  a  horse  and 
wagon  as  a  margin,  others  that  he  came  in  with  a 
capital  of  $500,  and  "bluffed  the  boys."  The  fact 
seems  to  be,  that  he  commenced  speculations  some 
time  before  the  war,  lost  heavily  in  the  fall  of  stocks 
which  followed  the  McClellan-Richmond-campaign, 
borrowed  fresh  capital,  made  heaps  of  money,  and 
early  in  1863,  had  become  a  power  in  the  market. 
He  was  known  to  be  somehow  mysteriously  connected 
with  Vanderbilt.  He  was  the  principal  agent  of  the 
Commodore  in  engineering  the  great  rise  in  Harlem, 
during  the  spring  and  summer  of  1864.  This  added 
to  his  prestige  won  in  former  operations.  His  style 
of  operating,  too,  was  so  bold  and  so  dashing  and 
even  reckless,  and  yet  withal  there  was  such  method 
in  his  madness,  that  it  quite  captivated  "  the  boys," 
and  they  were  all  agog  when  Tobin  got  on  his  pins 


164  INSIDE    LIFE  IN   WALL    STREET. 

and  commenced  bidding.  Tall,  lithe  and  straight  as 
an  Iroquois,  his  eyes  flaming  like  two  opals,  he  would 
charge  up  under  Drew's  heavy  batteries  and  take  all 
the  big  wads  of  certificates  the  old  man  would  fire  at 
him.  Unlike  most  of  the  noted  operators,  whose 
faces  are  seamed  and  creased  as  if  some  ravenous 
bird  had  clawed  them,  he  has  a  face  which,  though 
somewhat  worn  and  haggard,  is  finely  chiseled  and 
lit  up  now  and  then  by  a  smile  which  is  of  the  most 
un-Wall  Street  geniality. 

His  policy  in  operations,  as  he,  himself,  lately 
informed  a  friend,  has  always  been  to  select  some 
stock  which  promised  gain,  find  out  all  he  could 
about  it,  and  then  concentrate  his  energies  and  capi- 
tal in  promoting  its  rise.  When  it  had  risen  high 
enough  to  insure  to  him  a  sufficiently  large  profit, 
he  would  sell  out,  and  turn  his  attention  to  some 
other  single  stock,  and  treat  it  in  the  same  way. 

Like  his  associate,  and  some  tune  colleague  in  rings, 
A.  G.  Jerome,  his  portfolio  has  contained  at  differ- 
ent times,  very  large  amounts  of  stocks,  now  of  Old 
Southern,  now  of  Hudson,  or  Pacific  Mail,  or  Erie,  or 
Rock  Island. 

At  the  close  of  1864,  he  was  rated  on  the  street, 
at  five  millions.  But  within  four  months  after,  he 
was  rumored  to  have  lost  nearly  two  millions,  chiefly 
by  bulling  gold  at  200,  in  the  teeth  of  Union  vic- 
tories, and  while  the  shattered  hulk  of  the  Southern 
Confederacy  was  going  down,  head  foremost.  Lat- 
terly, he  is  reported  to  have  made  and  lost  largely, 
in  New  York  Central. 

These  two  men,  were  the  bull-leaders  of  the  Pub- 
lic Board,  during  the  first  few  months  of  its  existence. 


STRANGE  STORIES  ABOUT  OPERATORS.     165 

They  inaugurated  a  system  of  tactics  in  stocks,  like 
that  by  which  the  "  little  corporal "  defeated  and  scat- 
tered the  Prussian  and  Austrian  armies.  This  system 
consisted  in  rapid  movements,  and  the  concentration 
of  their  forces  at  the  critical  moment  upon  one  point 
— a  single  stock.  They  soon  found  apt  pupils  and 
imitators  in  the  market. 

That  energetic,  but  motley  crowd,  which  com- 
posed the  Public  Board,  in  the  latter  part  of  1862, 
was  made  up,  as  already  remarked,  of  heterogeneous 
elements.  It  had  more  enterprise  and  talent  than 
money.  Many  of  its  members  had,  previous  to  the 
war,  carried  on  various  lines  of  business  extensively, 
but  had  lost  their  all  in  1861,  and  owed  hundreds  of 
thousands  besides.  Though  they  had  little  money, 
they  had  what  in  Wall  Street  supplies  its  place,  viz: 
confidence  in  the  upward  tendency  of  values.  They 
had  seen  men  almost  as  poor  as  themselves,  become 
affluent  in  a  few  months,  and  the  heavy  operators 
about  them  were  making  or  losing  a  hundred  thou- 
sand in  a  single  day.  A  volume  might  be  filled  with 
the  marvelous  stories  of  the  waxing  and  waning  for- 
tunes of  these  men.  One  of  them  owed  in  December, 
1862,  one  hundred  and  eighty  thousand  dollars,  and 
in  eight  months  after,  had  compromised  his  debts  at 
fifty  cents  on  the  dollar,  and  was  worth  clear  of  the 
world,  three  hundred  thousand  dollars. 

In  1861, 1  had  often  noticed  a  singular  looking  man 
standing  in  front  of  one  of  the  billiard  saloons  in  the 
upper  part  of  Nassau  Street.  He  bore  all  the  marks 
which  characterize  the  bar-room  loafer  or  "bummer," 
seedy,  bloated,  he  was  apparently  doomed  to  a  speedy 
and  miserable  end,  and  a  grave  in  the  potter's  field. 


166  INSIDE    LIFE  IN   WALL    STREET. 

In  one  year  from  that  time  I  saw  him  driving  a  pair 
of  ponies  in  Central  Park,  and  on  inquiring  his  name, 
learned  that  he  was  C.,  a  Wall  Street  man,  who  had 
made  $80,000  on  gold.  He  is  now  keeping  a  hotel, 
and  to  see  him  looking  after  the  comfort  of  his  guests 
in  the  lordly  self-sacrificing  way  common  to  hotel 
proprietors,  no  one  would  imagine  that  this  was  the 
desolate  "bummer"  of  Nassau  Street. 

Such  was  not  the  luck  of  D y.     He  was  a 

young  man  of  New  England  extraction.  In  1862, 
he  was  a  salesman  in  a  Broadway  dry  goods  jobbing 
house,  on  a  salary  of  $800  per  annum.  Having  made 
$600,  by  buying  a  few  cases  of  cotton  goods  on  credit, 
he  brought  this  sum  to  a  friend  who  had  been  long 
engaged  in  speculation,  requesting  him  to  take  it  and 

use  it  as  a  margin  to  buy  stock  for  his,  D y's, 

benefit.  He  received  in  reply,  the  usual  good  and 
disinterested  advice,  not  always,  however,  in  such 
cases  given,  viz :  "  Keep  out  of  the  street,  or  if  you 
will  speculate,  do  it  on  your  own  hook."  He  em- 
braced the  latter  alternative,  and  joined  the  Public 
Board.  His  personal  appearance  and  manners  made 
an  odd  impression  on  'Change.  Tall,  bulky  and  un- 
gainly, his  face  and  voice  reminded  one  of  a  gigantic 
bull-frog,  when  in  one  of  its  happiest  moods  of  a 
May  evening,  and  the  way  in  which  he  bellowed  out 
on  the  call,  set  the  whole  room  in  hysterics.  In  an 
evil  hour,  he  caught  a  virulent  epidemic,  which  pre- 
vailed extensively  in  the  market  about  that  time. 
The  name  of  this  disease  was  Harlem  on  the  'brain. 
He  bought  and  sold  nothing  but  Harlem;  he  talked 
and  thought  of  nothing  but  Harlem.  "It  was  bound 
to  go  to  two  hundred,  of  course,  and  no  one  could  stop 


FLYERS   IN   HUDSON  AT   THE    COAL-HOLE.        167 

it.  The  Commodore  was  bulling  it,  Jerome  was  bull- 
ing it,  the  'street'  was  all  bulling  it."  So  he  al- 
ways was  saying  and  acting  conformably — buying  it. 
In  four  months  he  made,  out  of  his  $600  margin, 
$40,000  on  his  pet  stock  during  its  rise  from  30  to 
181.  In  the  course  of  sixty  days  from  the  time 
when  he  might,  by  selling,  have  realized  his  profit  to 
that  amount,  the  stock  had  dropped  to  90.  During 
this  decline  he  clung  obstinately  to  his  stock,  and 
borrowed  largely  from  his  friends  to  keep  his  margins 
good,  but  long  before  the  price  had  touched  90,  he 
was  obliged  to  succumb,  with  the  loss  of  all  he  had, 
besides  $30,000  of  borrowed  money.  Within  a  week 
he  sailed  for  California,  and  was  last  heard  from 
while  keeping  sheep  on  the  hills  of  one  of  the  graz- 
ing counties  of  that  State,  calculating  the  amount  of 
the  next  wool  crop,  as  he  watched  his  nibbling  flock. 

To  return  to  the  point  in  the  preceding  chapter, 
from  which  we  have  digressed.  The  eager  cohort 
which  had  been  waiting  for  orders,  now  commenced 
moving  under  the  commands  of  their  Generals,  Je- 
rome and  Tobin.  The  battle  of  Antietam,  and  the 
retreat  of  Lee  to  the  other  side  of  the  Potomac  gave 
the  bulls  courage.  Illinois  Central  opened  the  ball 
by  a  rise  of  ten  per  cent.,  Pacific  Mail  danced  be- 
hind it  almost  as  fast.  Hudson,  Old  Southern,  Pan- 
ama, Reading,  Rock  Island  and  Pittsburg  stepped 
blithely  up,  while  Erie,  that  Rip  Van  Winkle  of  stocks, 
astonished  the  market  by  its  nimble  bounds,  rising  in 
a  few  weeks  thirty  per  cent.,  and  selling  at  67.  This 
campaign  lasted  about  thirty  days.  Then  stocks  fell 
back  a  little  and  paused. 

According  to  the  traditions  of  the  street,  certain 


168  INSIDE    LIFE   IN   WALL    STREET. 

seasons  used  to  be  assigned  in  which  stocks  were  ac- 
tive, and  certain  others  in  which  they  were  dull  and 
depressed.  December  is  usually  set  down  as  a  dull 
month,  while  after  the  new  year,  stocks  pick-  up 
and  become  more  active.  So  it  was  in  1862.  For 
six  weeks  prices  remained  firm,  but  comparatively 
dull. 

My  first  visit  to  the  Public  Board  was  early  in  Jan- 
uary 1863.  The  room  in  which  they  then  held  their 
sessions,  it  will  be  remembered,  was  the  basement  of 
No.  17  William  Street.  It  was  under  the  auspices  of 
my  old  broker,  0.,  that  I  obtained  access  to  this 
grotto.  The  day  was  a  nipping  one.  The  hangers-on 
about  the  door  had  retreated  to  some  of  the  neigh- 
boring restaurants.  The  winter  rise  had  already 
commenced.  The  dense,  black-coated  mass  of  hu- 
manity swayed  to  and  fro,  while  the  room  rang 
with  the  dissonance  of  bids  and  offers.  No  stock 
without  some  advance,  but  Hudson  was  the  favorite 
that  day.  It  opened  at  77  and  rose  to  80  on  the 
call,  then  fell  back,  or,  as  they  say  in  Wall  Street 
reacted  to  78. 

"Hudson  is  the  card  to-day,"  remarked  0. 

As  he  uttered  these  words,  a  broker  came  up,  and 
asked  if  he  was  buying  Hudson. 

"At  what  price?" 

"  Seventy-eight  and  a  quarter,  five  hundred  shares, 
at  that  price  ?  "  holding  up  his  finger,  interrogatively. 

"No,  unless  my  friend,"  turning  to  me,  "wishes  to 
buy,"  and  at  the  same  time  he  nudged  me  and  whis- 
pered: "  Buy  it,  Buy  it." 

Before  I  knew  it,  the  words  came  out  from  my  lips, 
"I'll  take  it."  "I'll  take  your  stock,"  repeated  0., 


I  POCKET  $10,000  ON  MY  FLYER.      169 

to  broker,  "put  it  down  to  me."  In  sixty  seconds  by 
the  clock,  80  was  bid  for  the  stock,  and  by  the  close 
of  the  day,  it  stood  at  84. 

Before  narrating  the  issue  of  this  unexpected  en- 
terprise, let  us  go  back  and  follow  the  history  of  that 
§3,600  profit  on  Erie,  which  accrued  to  me  in  the  fall 
of  1860. 

A  series  of  careful  purchases  in  which  the  whole 
stock  thus  bought  was  always  paid  for  and  held  till  it 
showed  a  profit,  had  swelled  the  $3,600  by  December 
1861  to  $5,000.  This,  and  the  original  margin  of 
$500  constituted  all  the  capital  that  I  purposed  sink- 
ing in  stocks. 

Of  this  sum  $  5,300  wras  then  invested  in  twro  hundred 
shares  of  Erie,  at  26*.  In  April,  1862,  100  of  these 
shares  were  sold  at  37,  and  the  proceeds,  $3,700,  in- 
vested in  (600)  six  hundred  shares  of  Harlem,  at  12£. 
Harlem,  it  should  be  stated,  is  half  stock,  i.  e.,  fifty 
dollars,  instead  of  one  hundred  dollars,  per  share, 
at  par ;  so  that  these  six  hundred  shares  were  only 
equal  to  three  hundred  shares  of  full  stock,  and  stood 
me  in  $3,675.  (In  two  years  and  three  months  from 
the  day  when  it  was  purchased,  that  pitiful  lot  of 
Harlem,  costing  only  $3,675,  could  have  been  sold 
for  $85,000.  Why  don't  men  hold  on  to  good  things 
when  they  have  them?  Wall  Street  men  never  do.) 
In  November,  the  remaining  one  hundred  shares  of 
Erie,  had  been  sold  at  64.  This,  with  the  old  margin 
of  five  hundred  dollars,  made  nearly  $7,000  cash  on 
hand,  besides  the  300  shares  of  Harlem,  which  showed 
a  considerable  profit.  But  I  had  broken  my  rule, 
never  to  operate  on  margins.  Here  was  danger  ahead. 

Hudson  had  risen  fifty  per  cent,  during  the  past 


170  INSIDE    LIFE  IN   WALL    STREET. 

six  or  eight  months.  Supposing  it  should  "break," 
and  fall  twenty-five  per  cent.  Let  me  see ;  twenty- 
five  per  cent,  on  five  hundred  shares,  would  be 
$12,500,  whew!  Nearly  all  my  profits  scraped  to- 
gether by  so  much  pains,  swept  away  in  an  instant. 
These  thoughts  occurred  as  swift  as  lightning,  the 
moment  after  the  stock  had  been  so  rashly  bought. 
My  reverie  was  interrupted  by  0.,  reminding  me, 
that  I  had  no  cash  in  his  hands,  and  that  he  should 
want  ten  per  cent,  margin,  i.  e.,  $5,000.  Having  been 
satisfied  on  this  point,  he  parted  from  me,  urging  me 
to  watch  the  market  very  closely,  and  not  let  my 
profit  run  away  from  me. 

Hudson  was  passing  into  strong  hands.  A  great 
financial  doctor  was  paying  it  daily  visits.  Dr.  C. 
Yanderbilt  had  it  under  his  special  care.  Every  day 
it  grew  better,  stronger.  It  jumped  about  like  a 
gymnast  preparing  for  the  prize  leaps;  then  it 
took  its  first  leap  to  94.  Its  second  leap  was  to 
be  to  the  hight  of  112.  Its  third  was  to  carry  it 
to  180. 

I  took  my  profit  on  400  shares  at  94,  and  kept  100 
shares  out  of  pure  curiosity,  to  see  where  the  price 
would  finally  land  me. 

Ten  thousand  dollars  in  cash  is  a  very  restless  thing 
in  a  speculator's  hands.  A  little  waif  picked  up  in 
the  street,  you  can  only  keep  it  by  griping  it  fast; 
relax  your  fingers  for  an  instant  and  it  is  gone  to 
wander  among  the  other  waifs  and  strays  until  some 
one  else  picks  it  up.  My  ten  thousand  dollar  waif 
stayed  with  me  until  I  saw  something  which  attracted 
my  attention  in  the  steamship  line,  as  will  appear 
more  fully  in  the  following  chapter. 


CHAPTER  IX. 
PACIFIC  MAIL  AND  LEONARD  W.  JEROME. 

Creative  Genius  in  America — The  Opening  of  the  Golden  Gate — The 
Battles  of  the  Steamship  Kings — The  Commodore  Makes  a  Hearty 
Lunch  off  Accessary  Transit  Company — Features  of  Pacific  Mail 
as  a  Wall  Street  Stock— It  Oscillates  like  the  Waves  of  the  Sea— 
"Unstable  as  Water  Thou  Shalt  Excel"— A  Grave-yard  for  the 
Bears — A  New  Ring  on  the  Changes  of  P.  M. — L.  W.  Jerome's 
Portrait— The  Sultan  in  Wall  Street—"  I  Never  Speculate,  Sir,  but 
I  will  Take  a  Little  Pacific  Mail  " — A  Secesher  gives  me  "Point " — 
The  Stock  on  its  Upward  March — Bulls  Charge  with  Flying  Artil- 
lery in  Front. 

|HO  says  the  American  people  have  no  crea- 
tive genius  ?  True,  they  have  never  sung 
of  an  "Achilles'  wrath,"  or  of  "Archangel 
fallen; "  they  have  never  painted  a  "Transfiguration," 
nor  composed  a  "Seventh  Symphony,"  nor  con- 
structed a  "Novum  Organum,"  nor  written  a  tragedy 
like  that  of  Hamlet.  They  have  had  no  Homer  nor 
Milton,  no  Raphael  nor  Beethoven,  no  Bacon  nor 
Shakspeare  to  fill  the  untenanted  niches  in  their  tem- 
ple of  fame  with  the  grander  shapes  of  Poetry,  Phil- 
osophy and  Art.  Imagination,  in  this  country,  lives 
in  the  future  rather  than  in  the  past.  It  is  the 
prophet  of  great  industrial  enterprises,  the  framer  of 
inventions,  and  subordinates  itself  to  the  spirit  of  the 
practical,  everywhere.  The  American  people,  we  may 
say,  are  continually  groaning  and  in  travail  with  such 


172  INSIDE    LIFE   IN   WALL    STEEET. 

strong  conceptions  as  were  brought  forth,  embodied 
in  the  steamboat,  sewing-machine  and  telegraph.  To 
this  mighty  brood,  also,  belong  the  schemes  like  the 
Pacific  Railroad  which  spans  a  continent  with  a  thou- 
sand leagues  of  iron  band,  and  like  the  Pacific  Mail 
Steamship  Company  which  plows  the  waves  of  the 
peaceful  sea  with  keels  which  bear  almost  to  our 
doors  the  tea  plant  and  the  cinnamon  plant  before 
they  can  shed  their  flowers  which  bloomed  under  the 
sky  of  Cathay. 

Of  American  enterprises  embracing  the  great  lines 
of  travel,  steering  their  course  by  the  westward  star 
of  empire,  and  moving  with  it  farthest  and  fastest, 
the  Pacific  Mail  Steamship  Company  was  the  pioneer. 
Its  originators  were  three  men  of  mark  in  the  mer- 
cantile world — Gardner  G.  Rowland  and  William  H. 
Aspinwall,  of  the  firm  of  Rowland  &  Aspinwall,  and 
Henry  Chauncey,  of  the  firm  of  Alsop  &  Chauncey. 
These  men  had  the  eyes  of  prophets,  ranging  widely 
over  the  land  of  promise  which  stretched  out  towards 
the  setting  sun.  The  accession  of  California  to  our 
national  domain  was  the  immediate  occasion  of  the 
incorporation,  in  1848,  of  this  company.  The  dis- 
covery of  gold  in  that  region  secured  its  speedy 
success.  For  twenty  years  it  has  been  a  modern 
Pactolus,  through  whose  channel  have  flowed  to  the 
marts  of  commerce,  the  golden  sands  whirled  down 
by  the  mountain  torrents  from  the  scarped  cliffs  of 
the  Sierra  Nevada,  or  crushed  by  the  more  impetuous 
and  eager  hand  of  man,  out  of  quartz  and  the  sul- 
phurets.  The  yearly  income  which  the  company 
derived  from  the  freights  of  gold  were  from  the  start, 
considerable,  and  the  aggregate  foots  up  something 


THE  OPENING  OF  THE  GOLDEN  GATE.     173 

enormous.  But  its  great  source  of  revenue  has  always 
been  the  carriage  of  passengers.  From  1848  to  1852, 
the  whole  world  seemed  to  be  packing  its  trunks,  and 
ho!  for  Eldorado!  Down  through  the  Gulf,  across 
the  Isthmus,  northward  to  the  Golden  Gate  they 
hurried,  and  a  refluent  tide  of  the  successful  or  dis- 
appointed, swept  back  again  by  the  same  route.  All 
this  swelled  the  profits  of  Pacific  Mail:  In  1850,  it 
doubled  its  original  capital  of  one  million,  and  in 
1853,  increased  its  capital  to  four  millions  to  meet 
the  necessities  of  travel. 

Meanwhile,  the  same  three  men,  Howland,  Aspin- 
wall  and  Chauncey  had,  by  the  aid  of  foreign  capital, 
carried  through  another  great  enterprise,  the  Panama 
Railroad.  Though  only  forty-seven  miles  in  length, 
from  Aspinwall  to  Panama,  the  completion  of  this 
road  involved  difficulties  and  disasters  which  would 
have  appalled  men  less  rich  and  resolute.  No  white 
man  could  long  breathe  the  miasma  of  those  dank 
swamps  and  jungles,  and  live.  Commerce  seemed  to 
have  become  a  Moloch,  before  whose  grim  shrine, 
thousands  of  Irish  laborers  were  sacrificed.  But  the 
work  must  go  on — means  were  soon  devised.  Some 
one  proposed  our  kinky-haired  friends,  and  a  few 
ship-loads  of  Jamaica  negroes  accordingly  supplied 
the  waste  and  finished  the  line. 

But  the  Pacific  Mail  Company  were  not  long  per- 
mitted to  reap  the  fruits  of  their  enterprise,  undis- 
turbed. The  carrying  trade  from  New  York  to 
Aspinwall  had  been  taken  by  those  modern  sea- 
king?,  C.  K.  Garrison,  Charles  Morgan  and  Marshall 
0.  Eoberts,  and  above  these,  loomed  the  figure  of  the 
irrepressible  "  Commodore,"  whose  march  (then)  "was 


174  INSIDE    LIFE  IN   WALL   STREET. 

over  the  mountain  wave,"  and  not  as  now,  over  the 
iron  rail. 

One  of  the  rival  enterprises  in  which  he  engaged, 
was  the  Nicaragua  Accessary  Transit  Company,  which 
has  been  heretofore  mentioned. 

In  the  history  of  steamship  navigation,  no  more 
interesting  passage  could  be  written  than  that  relat- 
ing to  the  rivalries  in  the  California  trade  during  the 
first  twelve  years  after  the  accession  of  that  State  to 
the  Union.  Morgan,  Garrison,  Roberts,  Vanderbilt, 
the  Accessary  Transit  Company  and  the  Pacific  Mail 
Company,  all  fighting  for  the  largest  share  in  that 
lucrative  trade,  and  with  fortunes  that  shifted  from 
each  to  the  other  by  turns.  In  some  of  the  ancient 
naval  battles,  we  read  that  the  ships  were  armed  with 
gilded  beaks,  for  the  purpose  of  running  down  and 
sinking  the  vessels  opposed  to  them.  In  the  emulous 
warfare  of -which  we  are  speaking,  the  steamships  may 
be  said  to  have  been  armed  with  golden  beaks,  for 
the  contest  was  to  be  decided  by  the  force  of  hard 
money, — by  the  superior  weight  of  the  precious 
metal.  After  numerous  collisions  and  a  severe  can- 
nonade of  ruinously  low  fares,  it  was  found  at  the 
end  of  the  conflict,  that  the  eagle  beak  of  C.  K.  Gar- 
rison was  disfigured,  Marshall  0.  Roberts  lay  crippled 
and  helpless,  and  even  the  Commodore  was  not  un- 
scathed. 

But,  while  this  new  edition  of  the  old  sea-rovers 
were  fighting  among  themselves,  the  traveling  public, 
upon  whom  they  were  wont  to  levy  toll,  were  bene- 
fited. The  prices  of  passage  to  California  ran  down 
to  a  low  rate,  and  the  hearts  of  the  way-farers  were 
gladdened. 


TRIBUTES    TO    "KING    CORNELIUS."  175 

In  1856,  the  affairs  of  the  Nicaragua  Accessary 
Transit  Company  were  found  to  be  in  a  bad  way.  C. 
Vanderbilt,  the  individual,  had  advanced  to  C.  Van- 
derbilt, President,  large  sums,  and  was  preparing  to 
bolt  without  gagging  the  whole  assets  of  the  compary 
which  he  held  as  collateral.  This  process  was,  as 
usual,  speedily  and  (for  C.  V.)  happily  accomplished. 
The  Pacific  Mail  Company  deemed  this  a  favorable 
opportunity  to  get  rid  of  so  formidable  a  competitor, 
paid  King  Cornelius  an  annual  tribute  of  $480,000, 
per  annum,  for  a  fixed  period,  on  condition  that  he 
would  run  no  other  competing  line  on  the  Pacific  side, 
and  once  more,  all  was  quiet  on  the  San  Juan.  Out  of 
these  transactions,  grew  the  famous  suit  brought  by 
the  receiver  of  the  Nicaragua  Accessary  Transit  Com- 
pany, by  John  Sherwood,  his  attorney,  vs.  C.  Vander- 
bilt, involving  claims  to  the  amount  of  $2,000,000, 
which  dragged  its  slow  length  along  through  the 
courts  for  so  many  years.  Pending  this  suit,  the 
stock  of  the  N.  A.  T.  Co.,  oscillated  for  a  season,  be- 
tween twelve  and  a-half  cents,  and  nine  dollars  a 
share  in  the  stock-market,  and  finally  disappeared 
into  that  limbo  of  nothingness,  to  which  the  defunct 
stocks  of  Wall  Street  are  consigned. 

Of  all  the  historical  stocks  of  Wall  Street,  consider- 
ing its  vast  arcs  of  vibration,  its  sudden  fluctuations, 
its  enormous  dividends,  the  fortunes  it  has  made  and 
marred,  its  growth,  and  its  far-reaching  and  accom- 
plished aims,  Pacific  Mail  is  the  most  remarkable. 
In  1857  it  sold  for  50,  in  1867  it  sold  for  what  was 
equivalent  to  700,  on  the  basis  of  the  increased  stock ; 
in  1849  it  had  two  second-class  and  frail  steamships, 
plying  between  San  Francisco  and  Panama ;  in  1869 


176  INSIDE    LIFE  IN   WALL    STREET. 

it  had  twenty-three  steamships,  each  one  of  which 
was  a  floating  palace  of  a  grandeur  and  beauty  passing 
the  common  show  of  naval  architecture,  and  plying 
between  New  York  and  Aspinwall,  between  Panama 
and  "Frisco,"  and  between  "Frisco"  and  Yokohama, 
Nagasaki,  Shanghai  and  Hong-Kong.  He  who  visits 
the  office  of  the  company  in  the  banking  house  of 
Brown  Brothers,  and  in  which  marble,  iron,  plate 
glass,  black  walnut  and  fresco,  form  a  pleasing  com- 
bination of  solidity  and  beauty,  will  be  reminded 
that  he  may  here  shake  hands  with  China  for  a  small 
consideration. 

But  we  are  to  speak  of  the  stock  as  a  market  value, 
on  'Change,  and  of  its  singular  fluctuations  since  1861. 
It  may  be  viewed  as  a  type-stock  of  the  street.  The 
very  fact  that  its  value  is  contingent  on  so  many  cir- 
cumstances arising  out  of  the  business  of  the  Com- 
pany, gives  it  that  character.  It  has  been  associated 
with  the  water,  that  very  unstable  element  j  exposed 
to  storms  and  marine  disasters ;  to  pirates ;  to  the  rev- 
olutions in  Central  America ;  to  wars,  and  rumors  of 
wars  with  foreign  powers ;  to  the  ebbing  of  the  tides 
of  transmigration;  to  the  completion  of  the  Pacific 
Railroad ;  to  competing  lines  on  the  ocean,  and  to  mu- 
tations of  business  in  that  most  speculative  and  ultra- 
enterprising  of  states,  California.  These  are  the  va- 
riable quantities  that  have  always  entered  into  the 
calculations  of  the  bears  of  Wall  Street  in  depressing 
the  stock.  Then  on  the  other  side  there  are  the  vast 
assets  and  profits  of  the  Company,  the  growth  of  the 
country  in  general,  and  of  the  mining  interest,  and 
latterly  of  the  China  trade  in  particular.  These  are 
constant  quantities  that  Tiave  always  entered  into 


OPERATIONS   IX   PACIFIC   MAIL.  177 

the  calculations  of  the  bulls  in  elevating  the  stock. 
Accordingly,  long  before  the  great  speculation  which 
commenced  in  1862,  it  was  one  of  the  great  bal- 
loons to  be  inflated  or  depressed  according  to  the 
wishes  of  stock  leaders.  Jacob  Little  and  Daniel  Drew 
have  sometimes  made  great  sums  by  depressing  it, 
but  the  stock  has  generally  been  a  cemetery  for  the 
bears.  The  operator  who  deals  in  Pacific  Mail,  is  like 
the  mariner  who  embarks  on  a  treacherous  sea.  He 
can  look  down  through  its  depths  and  see  the  bleach- 
ing skeletons  of  bears  who  in  their  day  made  Wall 
Street  resound  with  their  growlings.  Who  could 
safely  sell  short  a  stock  which  rose  by  the  hundred 
per  cent. 

More  rarely  this  stock  has  proved  the  ruin  of  the 
bulls,  not  a  few  of  whom,  since  1867,  have  met  their 
fate  by  operating  in  it  for  a  rise.  The  recent  failure 
of  the  great  house  of  Lockwood  &  Co.  is  a  note- 
worthy example.  They  owed  their  disasters  mainly 
to  the  heavy  fall  in  the  price  of  stock  which  they 
had  bought  at  a  high  rate. 

In  the  year  1861,  Pacific  Mail  was  greatly  de- 
pressed. The  fear  of  complications  with  foreign 
powers  kept  down  its  market  price,  and  at  the  time 
of  the  Trent  affair  in  December  of  that  year,  it  fell 
to  69.  But  the  earnings  of  the  succeeding  year  were 
enormous,  and  in  the  latter  part  of  1862,  a  "ring"  of 
a  new  and  singular  character  was  formed  in  it.  The 
whole  stock  was  $>4,000,000,  divided  into  forty  thou- 
sand shares.  Twenty-six  thousand  shares  of  this 
amount  were  bought  by  a  combination  of  such  men 
as  W.  H.  Aspinwall,  and  Brown  Brothers,  the  Anglo- 
American  Banking  House,  etc.  This  stock  was  trans- 


178  INSIDE    LIFE   IX   WALL   STREET. 

ferred  to  Brown  Brothers,  by  an  irrevocable  stock 
power,  as  trustees  to  hold  it  Jive  years  for  the  joint 
benefit  of  members  of  the  ring.  This  left  fourteen 
thousand  shares,  which  was  in  the  hands  of  private 
investors. 

Who  was  to  be  the  Wall  Street  representative  of 
the  ring — the  manipulators  of  this  stock — who  would 
lead  the  upward  dance  of  the  price  ? 

No  one  who  has  visited  Central  Park,  will  have 
failed  to  remark  four  bay  horses,  standing  at  least 
seventeen  and  a-half  hands  high,  bowling  along  on 
an  easy  trot,  and  drawing  after  them  a  huge  "drag." 
Sitting  on  the  box,  holding  the  reins,  is  a  tall  man, 
fashionably,  but  somewhat  carelessly  attired,  having 
a  slight  stoop,  a  clear  olive  complexion,  a  tigerish 
moustache,  and  a  cerulean  eye.  This  is  Leonard  W. 
Jerome,  a  leader  of  the  fashion,  a  prince  of  the  turf, 
and  lately,  a  potentate  in  the  stock-market.  Some 
men  are  born  speculators,  some  achieve  it,  and  some 
have  speculation  thrust  upon  them.  All  these  con- 
ditions may  be  predicated  of  L.  W.  Jerome,  and  Avhen 
he  left  Rochester,  and  came  into  Wall  Street,  he 
found  his  proper  niche.  The  head  to  conceive,  the 
daring  to  undertake,  and  the  nerve  to  persist,  are  all 
*his.  Nor  is  his  confidence  and  buoyancy  under  dis- 
aster less  remarkable.  Like  all  men  of  his  class,  he 
has  been  now  and  then  temporarily  prostrated  by 
some  one  of  those  singular  hurricanes  in  finance, 
which  come  and  pass  over  as  suddenly  as  a  white 
squall  in  the  Southern  Pacific.  But,  no  matter  how 
swift  or  low  the  fall,  he  has  always  kept  up  good 
heart,  and  hailed  his  surviving  comrades  with  the 
words,  "  I  am  all  right,  boys ;  I'll  be  with  you  again 


A   WALL   STREET    SULTANT.  179 

in  a  jiffy."  Under  such  circumstances,  he  has  always 
met  every  dollar  of  his  obligations.  Once  he  found 
himself  saddled  with  half  a  million  of  bogus  Indiana 
bonds.  He  paid  up  in  full.  Another  time  within 
the  past  three  years,  he  found  himself  out  of  pocket 
on  Pacific  Mail  nearly  one  million  dollars.  Then 
the  carpers  and  inalignants  of  the  street  were  crying 
out — "  Jerome  has  found  his  Waterloo  !  "  but  in  six 
months  he  picked  up  half  of  his  lost  million,  and 
made  his  adversaries  pine  with  envy. 

He  was  hred  to  the  law,  and  this  may  account  for 
a  certain  conservatism  which  seems  to  have  led  him 
to  operate,  for  the  most  part,  in  dividend-paying  se- 
curities, calling  attention  to  the  rule  that  intrinsic 
values  will  in  the  end  bring  profit,  while  the  inflated 
'•fancies"  and  mere  market  values,  as  surely  in  the 
long  run  bring  loss.  Like  his  brother  Addison  G.  Je- 
rome, he  has  generally  been  a  bull  in  stocks. 

A  mortal  feud  long  existed  between  him  and  Dan- 
iel Drew,  in  which  they  mutually  gave  and  took 
wounds.  In  1864  he  took  a  slice  out  of  Uncle 
Daniel,  on  Harlem,  of  the  size  of  a  quarter  of  a 
million.  In  1865  his  opponent  retaliated  by  scoop- 
ing out  of  him  a  couple  of  hundred  thousands  on 
Erie.  There  was  a  poetic  fitness  that  such  a  man 
should  be  the  bull-leader  in  Pacific  Mail — a  stock  re- 
minding us  by  its  very  name  of  the  treasures  of  Eldo- 
rado, and  of  the  "barbaric  pearl  and  gold,"  which  the 
Orient  is  said  to  "shower  on  its  kings."  In  his  tastes 
and  his  munificence  he  has  been  a  kind  of  Sultan  of 
India  or  Rajah  of  Benares.  Stables  rose  at  his  bid- 
ding fit  for  the  horses  of  Caligula.  A  race-course 
was  laid,  which  bears  his  name,  worthy  of  the  plains 


180  INSIDE    LIFE  IN   WALL    STREET. 

of  Elis,  and  his  garlanded  Apician  banquets  rivaled 
those  of  Lucullus.  All  that  he  did  was  on  such  a 
princely  scale  as  to  show  that  he  knew  how  to  spend 
as  well  as  to  make  money.  Under  the  heavy  pur- 
chases which  he  made,  Pacific  Mail  rose  rapidly  from 
par  to  one  hundred  and  sixty. 

The  whole  pack  of  Bandogs  of  the  street  sat  on 
their  haunches  with  mouths  that  watered  and  uttered 
feeble  yelps  of  hungry  excitement  as  they  wistfully 
watched  its  upward  progress,  yearning  to  snatch  at 
the  tempting  feast,  but  held  in  the  leash,  some  by 
impecuniosity,  and  some  by  irresolution  or  prudence. 

It  seemed  like  madness  to  buy  Pacific  Mail,  now 
that  it  had  risen  100  per  cent,  in  thirteen  months.  A 
few  outsiders  ventured  in. 

"What's  the  matter  with  P.  M. ?"  inquired  C.,  a 
well-known  merchant,  of  G.,  a  leading  operator,  whom 
he  met  on  the  street  cars  one  morning,  just  as  the 
stock  had  reached  145. 

"  Going  up !  Going  up ! "  replied  G.,  "  you'd  better 
take  a  little." 

"I'd  as  soon  think  of  opening  a  dress-goods  store 
over  a  volcano!"  rejoined  C.,  "I  never  buy  P.  M. 
above  75." 

"You'll  never  see  it  at  75,  again,"  and  G.  whis- 
pered something  in  his  ear,  whereat  C.  looked  as- 
tounded. 

Whether  C.  ever  bought  any  Pacific  Mail,  we  can- 
not affirm,  but  this  we  know,  that  two  or  three  weeks 
after,  when  the  price  was  thirty  per  cent,  higher,  C. 
was  seen  emerging  from  G's.  office,  holding  in  his 
cherishing  fingers,  a  plump  check,  which  he  regarded 
with  a  paternal  smile. 


GALLAXT  CHARGE  OF  THE  BULLS.      181 

In  the  spring  of  that  year,  and  while  Pacific  Mail 
was  being  manipulated  as  above  described,  I  became 
acquainted  with  a  certain  mysterious  individual  (a 
secret  agent  of  the  Southern  Confederacy,  as  I  after- 
wards learned),  who  was  boarding  at  the  same  hotel, 
and  was  in  the  habit  of  taking  "  flyers  "  in  the  stock- 
market.  He  informed  me  that  something  very  start- 
ling would  soon  occur  in  Pacific  Mail,  that  the  stock 
would  inevitably  depreciate  50  or  even  100  per  cent. 
He  spoke  with  all  the  confidence  of  certainty;  he 
asseverated  it  with  as  much  solemnity  as  if  he  were 
taking  his  oath  on  the  holy  Evangels.  On  my  ask- 
ing for  the  grounds  of  his  assertions,  he  replied  in 
the  soft  Tuscan  accent  of  his  native  State:  "Dog 
gone  it !  do  you  doubt  the  word  of  a  southern  gentle- 
man ?  I  tell  you  it's  dead  shore."  I  sold  short  200 
shares  of  P.  M.  at  160,  and  100  shares  more  at  162. 

The  stock-market  in  January,  1863,  was  like  an 
army  moving  up  a  steep  declivity.  The  old  guard, 
Erie,  Harlem,  etc.,  were  still  skulking  in  the  rear,  but 
Pacific  Mail  was  leading  the  van  upon  the  double- 
quick.  The  bears  sat  upon  different  peaks  of  this 
declivity,  watching  the  upward  movement  and  lick- 
ing their  lips  over  the  rich  opportunities  which  would 
soon  be  offered  them  for  attack  and  plunder,  "for," 
said  they,  "whatever  goes  up  much,  must  come 
down  much."  When  the  price  reached  160,  they 
began  to  hurl  down  blocks  of  shares  to  drive  P.  M. 
back.  It  still  rose,  staggering  to  164,  then  turned 
and  slowly  fell  back  to  160.  The  bears  now  threw  a 
perfect  shower  of  missiles.  It  quivered  a  moment, 
and  then  dropped  heavily  to  155,  rested  there  for 
one  short  breathing  space,  then  darted  up  in  a  few 


182  INSIDE    LIFE  IN   WALL   STREET. 

hours  to  165.  In  a  week  it  sold  at  178.  The  bears 
gave  .way  with  dreadful  losses.  Many  of  the  oldest 
heads  had  been  caught.  The  stock  never  halted  till 
it  touched  200.  The  rumor  went  round  the  street, 
that  Vanderbilt  was  buying  it.  The  spectacle  of 
Tobin,  bidding  fiercely  for  the  stock  at  190,  with  the 
aureola  of  the  Commodore's  prestige  surrounding  his 
blonde  brow,  disenchanted  the  bears  from  their  illu- 
sions. Some  of  the  more  deeply  initiated  were  now 
warned  by  their  friends,  with  dark  hints  of  what  was 
going  on  in  the  Jerome  pool.  They  covered  their 
contracts,  and  the  stock  fell  back  to  180. 

During  this  rise,  and  after  I  had  closed  my  400 
shares,  short  stock,  at  a  loss  of  $  10,000,  news  came 
that  the  Joseph  Chapman,  an  armed  schooner,  had 
been  seized  in  the  harbor  of  San  Francisco.  She 
was  a  letter-of-marque  of  the  Southern  Confederacy. 
The  plan  proposed  was,  to  capture  one  of  the  Pacific 
Mail  Steamers,  arm  her,  and  cruise  for  the  others. 
This  was  the  secret,  which  my  Southern  acquaintance 
was  building  his  hopes  upon.  If  the  Joseph  Chap- 
man programme  had  been  carried  out  successfully, 
no  doubt  the  stock  would  have  fallen  heavily  to  my 
individual  profit,  but  to  the  damage  of  the  Union 
cause.  Here  it  might  be  appropriate  to  indulge  in 
a  little  burst  of  patriotic  enthusiasm,  but  oh!  the 
memory  of  that  $10,000! 

At  this  point,  we  must  take  leave  of  Pacific  Mail, 
for  several  chapters,  and  turn  our  eyes  upon  another 
form  of  speculation,  which  had,  in  the  autumn  of 
1862,  assumed  a  definite  shape,  and  in  February,  1863, 
first  rose  into  huge  proportions. 


rr 


CHAPTER  X. 

"GOLD,   GOLD,  GOLD,  GOLD,— HOARDED,   BARTERED, 
BOUGHT  AND  SOLD." 

"  Fresh  Fields  and  Pastures  New  "  for  "  The  Boys  " — The  Gold  Genii — 
The  Lobbymen  and  Politicians  Take  a  Turn — Where  all  the  Gold 
Was — Secesh  at  the  Front — A  Petroleum  Maniac — I  Take  a  Flyer 
in  Oil,  and  Find  it  "  Oil  of  Joy  " — I  Go  "  Down  to  the  Sea  in  a 
Ship,"  and  What  my  Ship  Brought  when  it  Came  in — New  Re- 
cruits in  William  Street — Things  are  Working — Gold  "Breaks" 
for  200  and  then  "  Breaks  "  to  156 — Raking  in  the  Profits — A  Sum 
in  Algebra,  $73,000  +  f20,000— The  Bear-leader  in  Distress— The 
Gold  Dreamer,  and  how  His  Dream  Came  out — Men  and  Money  in 
Wall  Street— The  Autobiography  of  $500. 


CURING  the  year  1861,  gold  ceased,  generally, 
to  circulate,  as  money,  throughout  the  Re- 
public. Early  in  1862,  and  soon  after  the 
passage  of  the  Legal  Tender  Act,  it  began  to  be  dealt 
in  as  merchandise.  It  was  bought  in  the  market  at 
varying  prices,  and  then  having  been  bought  as  mer- 
chandise, it  was  used  as  money  to  pay  Government 
duties  on  the  debts  due  abroad.  From  legitimate 
traffic  it  is  an  easy  step  to  speculation  which  we  have 
already  termed  the  abuse  of  trade.  And  now  com- 
menced the  most  baleful  form  of  speculation,  that 
which  made  it  for  the  interest  of  the  parties  engaged 
in  it  that  the  national  currency  should  depreciate,  for 
as  every  one  knows  a  rise  in  gold  is  nothing  but 
another  name  for  a  fall  in  the  value  of  currency. 


186  INSIDE    LIFE  IN  WALL   STREET. 

Thus;  when  gold  sells  for  two  hundred,  a  dollar  in 
currency  is  worth  only  fifty  cents  in  gold ;  when  gold 
sells  for  five  hundred,  a  dollar  in  currency  is  worth 
only  twenty  cents  in  gold. 

I  will  not  here  and  now  reiterate  the  hackneyed 
arguments  against  the  morality  of  trafficking  on 
the  rise  and  fall  of  greenbacks,  and  the  embarrass- 
ments caused  in  the  commercial  world,  by  the  unset- 
tling of  the  standards  of  value.  No  doubt,  every 
one  but  the  gold  gamblers,  and  their  friends  and  de- 
pendents would  be  better  off  if  they  were  swallowed 
up  in  the  ocean.  I  speak  now  as  a  scribe,  not  as  a 
moralist.  The  fact  is  before  us,  gross  and  palpable 
and  thus  we  are  to  deal  with  it.  The  precious  metal 
prior  to  the  year  1861,  acted  its  part  in  the  operations 
of  commerce,  like  the  beneficent  Afrite,  in  Arabian 
story,  obeying  the  behests  of  its  master,  with  com- 
mendable fidelity,  but  the  breaking  out  of  our  civil 
war  seemed  to  have  driven  it  into  its  casket,  where 
it  lay  for  a  year,  and  then  issued  forth  under  the 
guise  of  a  malevolent  genie'.  This  genie  took  the 
form  of  a  cloud-statue,  not  "moulded  in  colossal 
calm,"  but  changing  its  shape  according  to  the  finan- 
cial wreather;  now  looming  up  to  a  portentous  size, 
and  anon  dwarfing  and  dwindling  under  all  kinds  of 
influences.  Like  similar  malign  agencies,  it  had  its 
chief  abiding  place  in  Wall  Street. 

The  daring  speculators,  who  had  by  the  assistance 
of  causes  already  mentioned,  so  successfully  forced 
up  the  price  of  stocks,  now  flushed  with  their  good 
fortune,  and  comprehending  the  situation,  turned 
their  attention  to  gold.  The  dealings  in  it  at  the 
coal  hole,  which  at  first  were  limited,  soon  came  to 


A   LARGE    PILE    TO    WORK   UPON.  187 

rival  the  transactions  in  stocks.  In  September,  1862, 
under  the  combined  influence  of  Union  disasters,  and 
heavy  purchases,  it  shot  up  to  135.  Early  in  Febru- 
ary following,  it  had  risen  to  150. 

Now  was  formed  the  first  notable  combination  to 
put  up  gold.  The  state  of  affairs  which  led  to  that 
sharp  and  sudden  rise  to  173,  which  was  to  pre- 
pare the  public  mind  for  the  wild  and  reckless  spec- 
ulations, extending  already  through  seven  years, 
and  still  hardly  diminished,  may  be  described  as 
follows,  viz: 

The  sum  total  of  gold  and  silver,  estimated  to  be 
then  in  the  country,  was  upwards  of  $250,000,000; 
rather  a  big  pile  to  get  into  a  "corner,"  you  will  say. 
But  only  little  over  one-quarter  of  this  was  in  the 
banks,  and  no  inconsiderable  portion  of  that  was 
held  on  special  deposit.  The  balance  was  scattered 
throughout  the  country,  much  of  it  in  the  South. 
The  private  bankers  held  several  millions.  Several 
millions  were  in  the  form  of  plate.  Much  was  buried 
in  the  earth  and  hoarded  up  in  chimneys  and  garrets. 
How  much  the  crusty  old  farmers  and  raven-like 
crones  of  the  rural  districts  had  hidden  away  in  old 
stockings,  between  mattresses  and  in  cupboards,  se- 
cret drawers  and  hollow  trees,  no  one  can  imagine, 
but  probably  enough  to  pay  a  year's  interest  on  a 
$1,000,000,000  of  debt.  Apart  from  the  idea  of  specu- 
lation, multitudes  laid  away  sums,  larger  or  smaller, 
against  that  very  wet  day,  when  a  bushel  of  currency 
might  not  buy  more  than  a  peck  of  meal.  Some 
of  the  large,  but  timorous  capitalists,  also  put  much 
of  their  property  into  exchange  on  London.  In 
this  way  the  floating  supply  of  gold  could  be 
12 


188  INSIDE    LIFE  IN   WALL    STREET. 

readily  absorbed  by  any  strong  ring  which  might 
be  organized.  Bills  of  exchange  drawn  on  the  com- 
mercial cities  of  Europe,  it  should  be  here  remarked, 
are  payable  in  gold,  and  therefore  rise  and  fall  in 
price  with  gold. 

During  the  preceding  year,  the  already  large  army 
which  was  "fighting  the  tiger"  on  'Change,  received 
a  re-inforcement.  It  came  from  the  South,  and  hav- 
ing had  ocular  proof  of  the  depreciation  of  the  cur- 
rency in  that  section,  had  fixed  its  eyes  on  the  course 
of  gold  in  the  Union  States,  and  looked  for  a  corres- 
ponding rise  here.  Most  of  these  men  had  brought 
with  them  sums,  larger  or  smaller,  principally  the 
latter,  in  bills  of  exchange  on  London,  the  aggre- 
gate amount  whereof  was  great,  and  was  deposited 
as  margins,  in  the  hands  of  Wall  Street  brokers,  for 
the  purpose  of  buying  gold.  These  exiles,  or  rather 
emigrants  from  the  Sunny  South,  were  a  motley 
crowd.  Some  of  them  tall,  gentlemanly-looking  men ; 
others  swarthy,  lank-haired,  tobacco-ruminant  indi- 
viduals from  the  Gulf  States.  They  haunted  William 
Street,  birds  of  ill-omen,  croaking  all  manner  of  dis- 
aster to  the  Federal  arms,  and  predicting  gold  at 
500.  Many  made  fortunes  by  being  always  con- 
sistent bulls,  but  lost  them  again,  by  the  tumble  of 
1865.  Such  was  the  situation,  when  I  made  my  first 
venture,  and  bagged  my  first  profit  in  gold.  In  order 
to  tell  the  whole  story,  I  must  go  back,  and  trace 
that  profit  to  its  doubtful  beginnings. 

In  the  month  of  October,  1861,  two  gentlemen  sat 
in  a  private  parlor  of  the  Grammercy  Park  House. 
The  one  was  a  well-known  pioneer  in  the  petroleum 
enterprise,  wearing  a  face  of  perennial  redness  and 


A   LOOK   AT   PETROLEUM.  189 

gold-bowed  spectacles;  the  other  was  the  narrator 
of  these  scenes.  The  ruddy  gentleman  was  holding 
forth  with  great  volume  and  fluency  upon  the  subject 
of  petroleum,  his  favorite  theme.  If  he  was  to  be 
believed,  besides  the  illuminating  and  lubricating 
properties  of  this  article,  it  had  a  great  variety  of 
other  uses.  It  was  death  to  vermin,  a  capital  disin- 
fectant, and  a  gorgeous  colorizer.  As  boot  grease, 
and  as  hair  oil,  it  was  unequaled.  The  most  delicious 
perfumes  might  be  manufactured  from  it.  It  was  a 
panacea  for  most  of  the  "  ills  that  flesh  is  heir  to."  It 
was  a  liniment  for  rheumatism,  a  lotion  for  wounds, 
and  a  "  sovereign  remedy  for  an  inward  bruise."  In 
token  of  which  last  he  produced  a  small  vial  from  his 
vest  pocket,  and  swallowed  a  part  of  its  contents, 
declaring  that  he  took  it  for  an  affection  of  the 
kidneys,  and  had  derived  great  benefit  from  the 
medicine. 

"This  article,"  added  he,  "is  now  selling  at  five 
cents  a  gallon  (including  barrel,)  at  the  wells,  and 
will  be  a  great  speculation  for  any  one  who  buys  it." 

"What  will  you  sell  me  fifteen  hundred  barrels 
at?"  inquired  I. 

"  Fifteen  hundred  barrels,  crude  petroleum — I  will 
sell  at — two  dollars,  per  barrel." 

"To  be  paid  on  delivery,  in  New  York?" 

"  To  be  paid,  on  delivery — at — the  wharf,  in  New 
York." 

This  bargain  was  nailed  by  a  small  memorandum 
in  writing,  signed  by  the  parties,  to  be  charged  ac- 
cording to  the  statute,  so  made  and  provided. 

Six  weeks  after  this,  the  barrels  were  duly  de- 
livered, per  Camden  and  Amboy  Railroad,  and  were 


190  1XSIDE    LIFE  IN   WALL    STREET. 

gold  on  the  wharf,  at  a  net  profit  of  $3,500,  and 
some  odd  cents,  petroleum  having  advanced  largely 
meanwhile. 

The  proceeds  of  this  lucky  stroke  were  a  few  weeks 
subsequently,  invested  in  refined  petroleum,  packed 
in  cans  and  cases  and  shipped  to  Australia.  The  fig- 
ures in  this  venture  stood  thus,  viz :  $9,700,  of  which, 
$6,200  was  an  advance  on  the  bills  of  lading ;  the  bal- 
lance,  $3,500,  was  the  actual  cash  embarked.  The 
vessel  which  carried  this  merchandise,  was  an  old  tub, 
warranted  not  to  make  over  six  knots,  even  with  "a 
wet  sheet  and  a  flowing  sea."  She  reached  her  des- 
tination after  a  voyage  of  one  hundred  and  twenty- 
five  days,  just  after  a  tt  spirt "  in  the  prices  of  the 
articles  shipped,  so  that  the  consignees  were  enabled 
to  close  the  shipment  at  a  net  profit  of  $6,500,  after 
deducting  freight,  commissions,  brokerage,  etc.,  etc., 
etc.  Several  other  delays  now  occurred,  all  very 
much  to  my  benefit,  such,  for  instance,  as  disputes 
over  samples,  references,  making  up  the  account  sales, 
and  finally,  when  the  return  bills  of  exchange  were 
forwarded,  the  steamer  which  conveyed  them  was 
wrecked  in  the  Indian  Ocean.  All  this  time,  gold, 
and  therefore  exchange,  was  steadily  rising.  When 
the  slow  old  ship  left  New  York,  gold  was  lOli ;  when 
the  gold  bill  on  the  Union  Bank  of  London  for  return 
sales,  reached  New  York,  gold  was  153.  Here  was 
a  new  profit.  Without  stopping  to  sell  my  draft, 
amounting  to  $10,000,  I  promptly  invested  it  as  a 
ten  per  cent,  margin  on  $100,000  gold,  bought  at 
153.  This  was  late  in  January,  1863. 

In  that  month,  a  combination  had  been  formed, 
known  as  the  "Washington  party,"  which  bought  up 


GEORGE  FRAXCIS  TRAIN  HEARD  FROM.    191 

several  millions  for  a  rise,  on  the  grounds  that  Con- 
gress would  authorize  the  issue  of  three  or  four  hun- 
dred millions  more  currency. 

This  movement  soon  became  known  to  the  leading4 
operators  on  the  street.  They  relaxed  their  hold  of 
stocks,  which  paused  in  their  course  upwards,  and  in- 
creased their  line  in  gold. 

The  rise  appeared  so  reasonable,  and  so  inevitable^ 
that  men  who  had  never  speculated,  began  to  make 
their  first  essay,  we  might  say  assay,  in  the  precious 
metal.  Strange  faces  were  seen  in  the  vicinity  of  the 
"  coal-hole."  Financial  oracles  of  the  rural  districts^ 
were  heard  on  the  corners  uttering  their  predictions} 
as  to  the  future  price  of  gold.  Quiet  old  bachelors, 
living  on  their  dividends,  were  seen  emerging  from 
their  up-town  snuggeries,  prepared  to  renew  their 
youth,  like  young  eagles,  in  the  courts  of  the  Stock 
Exchange.  Some  of  the  novices  could  be  observed, 
hovering  on  the  edges  of  the  battle,  or  gazing  with 
gloating  eyes,  on  the  ascending  price,  but  hardly  dar- 
ing to  venture  in. 

Meanwhile,  gold  kept  rising.  It  touched  160.  Now 
the  bull  machinery  was  put  in  motion.  The  tele- 
graph between  William  Street  and.  Washington,  went 
click-a-ty-click.  The  crowd  buzzed,  the  workmen 
were  hard  at  work,  lubricating  the  steam-presses, 
preparatory  to  another  edition  of  greenbacks,  con- 
taining all  the  modern  emendations. 

George  Francis  Train  was  seen  daily  leaning  grace- 
fully on  the  iron  railing  near  the  coal-hole,  engaged 
in  perusing  telegraph  literature.  Beside  him,  stood 
Pepoon,  looking  like  a  Dutch  Burgomaster  of  the 
olden  time.  George  Francis  said  gold  would  sell  at 


192  INSIDE    LIFE  IN   WALL    STKEET. 

200.  Pepoon  repeated  after  him,  200;  Addison  G. 
Jerome  said  200 ;  the  coal-hole  echoed  the  words. 

I  bought  $100,000  more  at  160.  In  a  week  the 
,price  rose  to  173,  and  looked  for  the  moment  as  if  it 
were  really  booked  for  200.  It  began  to  sink. 

The  $200,000  I  held,  was  dumped  overboard,  and 
left  me  with  a  profit  of  $28,000,  to  which  add  $10,000 
in  the  gold  bill,  sold  at  170,  and  making  $17,000  in 
currency,  footing  up  as  a  sum  total  of  profit,  $45,000. 

But  gold  now  commenced  falling.  Large  amounts 
were  forced  on  the  market,  according  to  rumor,  by 
the  Washington  party.  In  a  day  or  two,  the  secret 
came  out.  The  Government  had  imposed  a  tax  of 
one-quarter  per  cent,  on  all  sales.  I  thereupon  sold 
short,  $200,000  at  1691  to  170£.  Down  it  went  by 
the  run,  and  in  three  days,  sold  for  156.  Profits  on 
this  transaction,  $28,700. 

In  two  years  and  upwards,  with  hardly  more  than 
the  scratch  of  a  pen,  the  fifteen  hundred  barrels  of 
petroleum  bought  at  a  venture  on  credit,  and  without 
the  ultimate  expenditure  of  a  penny,  thus  rolled  up 
for  the  lucky  buyer,  $73,700 ! 

During  the  rise  of  gold,  from  130  to  173,  most  of 
the  outside  public,  and  the  younger  and  bolder 
operators  in  the  street  favored  a  rise,  and  were  active 
bulls;  a  few  inveterate  bears  like  Drew,  etc.,  true  to 
their  instincts,  still  sold  short,  but  were  severely  pun- 
ished, and  after  the  rise  of  gold  to  170,  covered  their 
contracts  and  stood  aloof.  Drew,  however,  whose 
losses  on  the  rise  were  said  to  have  been  half  a  mil- 
lion, is  said  to  have  persisted  in  his  programme,  and 
when  it  fell,  recovered  a  good  portion  of  his  losses. 
The  decline,  which  was  steadily  going  on  for  the  next 


A   GOLD   MONOMANIAC.  193 

six  months,  after  February  26th,  1863,  quite  upset 
the  calculations  of  those  enthusiastic  operators,  who 
looked  for  200,  as  a  limit  for  the  realization  of  their 
profits.  Many  of  these  individuals  held  manfully  to 
their  position,  fortified  by  the  enormous  profits  of 
their  operations  for  a  rise.  Among  this  class  were 
the  young  and  inexperienced  operators,  who  in  the 
spring,  thought  themselves  possessors  of  ample  for- 
tunes, and  in  the  succeeding  fall,  found  themselves 
either  worse  off,  or  in  very  much  the  same  position, 
as  when  they  commenced. 

The  speculation  of  which  we  have  been  speaking, 
brought  out  in  strong  relief,  that  which  we  may  call 
the  monomania  of  Wall  Street.  Men  who  pass  all 
their  time  there,  are  often  afflicted  with  this  form  of 
the  speculative  disease.  A  Wall  Street  monomaniac 
is  one,  who,  devoting  himself  exclusively  to  some  one 
stock,  by  thinking  long  and  deeply  upon  it,  and  con- 
tinually operating  in  it,  comes  at  last  to  think  and 
talk  of  little  else.  He  clings  to  it,  through  good 
report  and  evil  report,  and  through  actual  losses. 
The  gains  he  makes  in  it,  strengthen  his  mania.  It  is 
only  by  absolute  ruin  that  he  can  be  cured,  and  even 
then,  often  not  permanently.  He  still  babbles  of  it  in 
the  social  circle,  and  when  he  revisits  the  street,  always 
inquires  with  solicitude,  the  price  of  his  old  favorite, 
and  if  it  has  eventually  risen  very  greatly,  appeals 
triumphantly  to  that  fact,  in  justification  of  his 
course.  This  was  the  case  with  H . 

He  was  a  German-American  from  one  of  the 
Western  cities,  and  came  into  the  street  with  $4,500 
which  he  had  scraped  together,  by  buying  and  selling 
the  "wild-cat"  currency  which  flooded  his  native 


194  INSIDE    LIFE  DT.  WALL    STREET. 

State.  His  personal  appearance  was  something  of 
the  oddest.  The  bumps  on  his  head,  which  was 
sparingly  thatched  by  a  "plentiful  lack"  of  the 
capillary  substance,  would  have  astonished  a  phre- 
nologist. His  face  had  the  color  and  general  shape 
of  a  half-boiled  Indian  pudding.  His  eyes,  large  and 
bleary,  had  a  dreamy  look,  as  though  they  were  con- 
templating the  phantom  of  a  million  dollars  which 
haunted  his  imagination ;  and  that  feature  which  he 
dignified  by  the  name  of  nose,  was  merely  an  ex- 
crescence expanded  into  two  nostrils.  The  facilities 
furnished  him  by  his  gentlemanly  broker,  soon  taught 
him  to  appreciate  the  beauties  of  the  margin  system, 
and  he  was  afterwards  heard  to  express  the  opinion, 
that  the  time  would  come  when  he  would  buy  up  the 
whole  of  New  York  on  a  margin.  By  two  or  three 
lucky  operations  he  doubled  his  original  capital  of 
$4,500,  and  commenced  buying  gold  in  the  summer 
of  1863,  at  117  or  thereabouts.  His  first  purchase 
was  $90,000,  when  it  rose  five  per  cent.,  i.  e.,  to  122, 
he  bought  $90,000  more.  Following  this  programme 
and  buying  at  every  five  per  cent,  advance,  when  gold 
touched  173,  he  found  himself  carrying  $990,000, 
with  a  profit  of  nearly  $300,000.  During  the  five 
or  six  months  in  which  he  was  making  these  pur- 
chases, he  seemed  to  be  laboring  under  a  kind  of 
nightmare,  under  the  influence  of  which,  he  was  un- 
able to  realize  his  profits,  and  was  always  compelled 
to  buy.  He  thought  of  nothing,  dreamed  of  nothing, 
and  talked  of  nothing  but  gold ;  impalpable  gold-dust 
seemed  to  float  in  the  air  he  breathed,  and  every  ob- 
ject to  take  on  a  yellow  hue.  He  carried  in  his  left 
breast  pocket,  a  chunked  little  blank  book,  in  which 


NIPPED    BY   AN    UNTIMELY   FROST.  195 

all  his  purchases  were  entered,  and  his  time  was  about 
evenly  divided  between  the  study  of  this  book  and 
the  perusal  of  the  daily  quotations  of  the  price. 

This  delirium  of  speculation  seemed  to  have  some- 
what shattered  his  nervous  system,  and  he  was  wont 
to  lie  late  in  the  morning,  rarely  making  his  ap- 
pearance in  the  street  before  eleven  A.  M.  I  remem- 
ber meeting  him  often  in  Broadway,  making  a  bee- 
line  for  Wall  Street,  on  that  double-quick  gait,  known 
as  the  negro  trot;  when  he  would  suddenly  halt  and 
cry  out,  interrogatively, "  gold  ?  "  On  hearing  the  price 
he  would  throw  up  his  arms,  utter  a  little  ecstatic 
scream  and  resume  his  trot.  He  used  to  declare  he 
would  never  sell  for  less  than  a  thousand.  This 
was  the  limit  he  gave  his  broker  every  day,  and  every 
successive  rise  fortified  him  in  this  resolve  and  made 
him  more  and  more  callous  to  the  arguments  and 
ridicule  of  his  friends,  who  advised  him  to  take  his 
profits. 

But  H 's  greatness  was  soon  to  be  nipped  by 

an  untimely  frost.  In  the  fall  of  gold,  which  com- 
menced on  the  26th  of  February  and  continued  for 
the  next  few  days  thereafter,  his  profits  were  abridged 
to  the  amount  of  $200,000,  and  early  in  June  follow- 
ing, he  was  called  upon  by  his  broker,  for  more  mar- 
gin. Not  being  able  to  respond  to  the  call,  he  was 
sold  out  and  presented  with  an  account  which  showed 
a  balance  of  only  five  hundred  dollars  to  his  credit. 
This  fall  from  such  a  sunlit  hight  to  such  a  dead  level, 

almost  drove  H distracted,  but  failed  to  cure  him 

of  his  monomania.     He  still  kept  his  dreamy  eyes' 
fixed  on  gold.     Its  tendency  was  plainly  downwards. 
Gettysburg  was  fought,  and  it  sank  lower.     Vicks- 


196  INSIDE    LIFE   IN   WALL   STREET. 

burg  fell  and  gold  dropped  to  131.  .  When  the 
"swamp  angel"  sent  its  messages  into  Charleston, 
and  Fort  Wagner  became  a  Union  fortress,  gold  at 
122  looked  as  if  it  would  drop  to  par.  But  now  it 
suddenly  reversed  its  course  and  began  to  mount  that 
lofty  hight  which  it  was  destined  to  scale  before  ten 

months  were  gone.    H jumped  in  and  bought  ten. 

(Wall  Street  lingo  for  ten  thousand.)  He  moved  on 
now,  taking  every  step  gingerly,  and  bought  ten  more 
at  each  fifteen  per  cent.  rise.  In  one  year  from  Sep- 
tember, 1863,  he  owned  three  brown-stone  fronts. 
He  is  still  a  flourishing  operator,  but  only  in  gold, 
never  buying  more  than  he  can  take  care  of,  and 
never  letting  a  profit  run  away  from  him. 

In  Wall  Street,  the  man  is  nothing;  the  money, 
everything.  The  first  inquiry  when  a  new  operator 
enters  the  field,  is,  how  much  money  does  he  carry  ? 
Not  at  all  what  kind  of  a  man  is  he,  what  are  his 
antecedents,  etc.  This  inquiry  having  been  answered, 
he  is  labeled  with  the  sum  for  which  he  is  good,  and 
after  that  loses  his  personal  identity  in  the  money  he 
possesses.  While  a  cracksman,  slave-trader  or  pirate 
might  walk  the  street,  not  merely  unimpeached,  but 
saluted  with  respect,  if  covered  with  the  broad  label 
inscribed  with  $100,000  in  front  and  indorsed  with 
it  behind,  an  archangel  would  be  of  little  account, 
unless  he  brought  with  him  a  good  store  of  shekels 
in  a  golden  urn,  for  here 

"  Mammon  wins  his  way  where  seraphs  might  despair." 

Thus  it  happens  that  an  autobiography  of  expe- 
riences in  Wall  Street  might  properly  be  entitled  the 
history  and  growth  of  so  much  money,  whatever  sum 


AUTOBIOGRAPHY    OF    $500.  197 

the  operator  may  have  started  with.  Such  an  auto- 
biography as  this  might  be  presumed  to  commence 
thus :  My  name  is  one  thousand  dollars,  my  surname 
greenbacks.  I  was  begotten  in  an  engraver's  office, 
and  born  from  a  steam-press  early  in  the  year  1863. 
My  general  appearance  was  pleasing,  my  color  was 
that  "soft  green  on  which  the  eye  loves  to  repose." 
I  circulated  freely  in  society  and  was  much  courted. 
At  an  early  age  I  took  up  my  permanent  abode  in 
Wall  Street,  where  I  thrived  and  grew  very  large. 
At  last,  from  my  increased  size,  they  called  me  one 
hundred  thousand  dollars,  etc.,  etc.,  etc. 

In  the  foregoing  pages,  I  have  given  the  history 
of  $500  in  Wall  Street,  which  by  April,  1863,  had 
after  numerous  trials  and  vicissitudes  of  fortune, 
grown  into  $20,000,  or  was  readily  reducible  to  that 
sum,  standing  thus : 

600  Shares  Harlem,  (half  stock,  $50  per  share),  selling 

in  the  market  at  $56 $16,800  00 

100  Hudson,  which  showed  a  profit  of 2,200  00 

Margin  on  same, 1,000  00 

$20,000  00 
Profits  on  gold,  etc., 73,700  00 

$93,700  00 

I  stood  $93,700  ahead. 

The  sun  never  shines  so  brightly,  and  fiercely, 
as  just  before  a  thunder-storm,  which  gathers  its  own 
force  from  that  same  brightness  and  heat.  Meta- 
phorically speaking,  there  are  vast  caverns  in  Wall 
Street,  where,  as  in  the  realms  of  ^Eolus,  of  classic 
myth,  the  winds  are  accumulated  and  pent  up.  They 
are  let  loose  in  panics,  and  panics  occur  when  stocks 


19$  INSIDE    LIFE  DT  WALL  STREET. 

that  have  been  over-sold,  rise  enormously,  as  well  as 
when  they  fall  enormously. 

The  king  of  winds,  the  jEolus  of  Wall  Street,  in 
1863,  was  Cornelius  Yanderbilt,  for  did  he  not  carry 
Harlem  up  in  a  whirlwind? 


CHAPTER  XL 
THE  FIRST  GREAT  HARLEM  RISE. 

The  Tale  of  Three  Men  who  met  in  a  Doorway  During  a  Storm— ShaD 
We  Sell  Harlem  Short?— The  Brokers  Say  Yes— Investigations— 
What  is  a  Broker's  Opinion  Good  For?— The  Decision  is  Made, 
and  We  "  Sell  'em  "— Vanderbflt  in  Search  of  Investments— "  I 
Have  a  Few  Millions  Lying  Idle,  Sir,  and  I  Wish  to  pnt  it  into 
Something  that  Wffl  Pay  "—The  Patriots  of  the  City  Hall  in  the 
Field— A  Large  Donation  to  Harlem— The  Commodore  Gets  EGs 
Dander  Up— The  Clown  of  the  Stocks  Flays  His  Antics— A  Miss 
is  as  Good  as  a  Mile— Legislative  Tricks— The  Stock  Mounts,  and 
the  Bears  are  Slaughtered— Harlem  the  Double-edged  Sword  of  the 
Stock-MarketH-How  I  Came  Oul^-Incidente  of  the  Rise. 

(HE  market  was  taking  a  breathing  spell.  It 
was  a  complete  April  day.  The  sun  had 
risen  in  an  unclouded  sky,  and  the  breezes 
from  the  noble  bay,  blew  their  reveille  to  the  waking 
spring,  when  suddenly  the  heavens  became  overcast, 
the  wind  shifted  to  the  north-east,  and  blew  a  gale, 
mixed  with  snow.  There  were  three  of  us.  We  had 
taken  refuge  out  of  the  storm,  in  one  of  the  hall- 
ways, on  William  Street,  near  Exchange  Place,  and 
were  discussing  the  all-absorbing  topic. 

"  I  sold  out  my  business,"  said  one,  who  was  a  re- 
tired baker,  "  and  came  into  the  stock-market  a  year 
ago.  I've  no  reason  to  complain.  I  bought  stocks 
right,  and  sold  them  right  I'm  $100,000,  clear  of 
the  world.  I  am  going  to  get  out  of  this  business, 


200  INSIDE    LIFE  IN   WALL    STKEET. 

it  uses  me  up.  Only  one  more  operation  for  me, 
and  then  I  shall  pull  up  stakes,  and  decamp." 

"And  what  may  that  'one  more  operation'  be?" 
inquired  another,  who  was  a  burly  railroad  contractor 
and  engineer. 

"I'm  only  waiting  for  Harlem  to  rise  to  60,  and 
then  I  mean  to  give  'em  some  on  the  short  tack." 
The  railroad  man  smiled,  and  spoke  thus :  "  I  came 
into  the  market  four  months  ago.  They  always  told 
me  I  had  a  good  eye  for  a  country.  When  I  came 
here  I  took  my  survey,  and  staked  out  my  route, 
kept  clear  of  steep  grades,  and  have  brought  myself 
in  on  time,  with  one  hundred  and  fifty  thousand  dol- 
lars in  my  baggage  car.  Now  I  am  going  to  back 
train.  I'm  through  with  Wall  Street,  but  I  do  want 
to  make  one  more  operation."  "And  what  may  that 
one  more  operation  be  ?  "  inquired  I. 

"  I'm  bound  to  sell  Harlem  short,  when  it  gets  up  a 
little  higher,"  he  replied. 

"  I  have  a  little  Harlem  all  paid  for ;  if  it  wasn't 
for  that  circumstance,  I  should  feel  like  selling  it 
short,"  I  exclaimed. 

"You  don't  surely  say  that  you  have  been  buy- 
ing Harlem!"  exclaimed  both  my  companions  at 
once. 

"I  should  as  soon  think  of  buying  old  newspapers," 
said  the  baker. 

"  Or  that  dust  heap  in  the  street,"  said  the  railroad 
man. 

"I  think  I  shall  hold  that  Harlem  just  to  see  where 
it  will  go.  But  let's  go  round  and  talk  with  some  of 
these  brokers." 

So  we  went  out  into  the  storm. 


COMPARING  NOTES  ON  HARLEM.       201 

V ,  into  Avhose  office  we  first  entered,  was  a 

well-groomed,  little  man,  with  a  bright,  black  eye. 
He  sat  behind  a  long  desk,  handling  his  papers  nim- 
bly with  both  hands,  and  looking  very  much  as  if  he 
were  playing  exercises  on  a  piano. 

He  saw  business  wrritten  on  the  faces  of  the  trio, 
as  we  entered,  and  he  stepped  briskly  forth  from  his 
musical  exercises. 

"What  do  you  think  of  Harlem,  V ?" 

"Harlem  57 £  at  the  close,  gone  up  too  much,  must 
react." 

"  What  do  they  say  about  it  in  the  board?" 

"  Well !  all  sorts  of  opinions.  Some  say  that  Van- 
derbilt  is  buying  it,  and  that  it  will  go  to  par,  but 
most  of  the  board  seem  to  think  there's  no  reason 

in  the  movement.  G ,  B and  L were 

selling  it  freely  this  morning." 

"  When  it  strikes  60,  sell  one  thousand  shares  for 
my  account,"  said  the  railroad  man,  "order  good  till 
countermanded." 

Next,  we  went  to  G 's  office.  He  was  a  differ- 
ent type  of  a  man  from  V .  Being  rather  heav- 
ily moulded,  and  still  of  his  tongue,  he  had  obtained 
the  reputation  of  possessing  great  good  sense. 

He  thought  Harlem  higher  than  it  should  be.  A 
good  sale  undoubtedly.  Its  intrinsic  value  was  about 
fifteen,  instead  of  fifty-seven.  "  But,"  inquired  he, 
"  what  about  the  street  franchise  ?  Hasn't  Harlem 
got  something  of  that  kind?" 

All  the  other  brokers,  whose  offices  we  visited,  were 
unanimous  in  the  opinion  that  Harlem  was  a  good 
short  sale.  Some  said  the  certificates  were  only  good 
for  wrapping  paper.  Others  said  they  would  specu- 


202  INSIDE    LIFE  IN   WALL    STREET. 

late  in  it  at  about  15.    But  all  concurred  in  thinking 
its  value  more  speculative  than  real. 

Here  let  us  stop  a  moment  to  remark  that  most 
men,  at  least  novices,  are  wont  to  ask  advice  of  their 
brokers,  as  to  what  stock  they  shall  buy  or  sell.  But 
is  a  broker's  opinion  worth  anything  ?  Not  generally. 
"Never  buy  or  sell  on  a  broker's  judgment,"  said  a 
member  of  one  of  the  oldest  and  safest  firms  in  the 
street,  lately  to  a  customer,  "if  you  do,  you'll  be 
sure  to  lose  your  money."  This  is  a  great  truth. 
The  brokers  borrow  their  feelings  from  the  market. 
If  the  market  is  depressed,  they  are  affected  accord- 
ingly; if  the  market  is  active  and  high,  they  are 
elated  in  a  corresponding  degree.  In  this  way  their 
advice  to  their  customers  is  to  sell  when  they  ought 
to  buy,  and  to  buy  when  they  ought  to  sell.  Again, 
a  broker's  judgment  is  warped  by  being  constantly 
in  an  atmosphere  of  mere  market  values,  irrespective 
of  real  values.  A  broker  will  often  laugh  at  a  cus- 
tomer, who  is  figuring  up  the  true  value  of  a  secu- 
rity by  examining  the  condition  of  the  railroad  com- 
pany which  issues  it.  If  a  stock  has  been  selling  at 
a  very  low  price  for  several  years,  it  is  consigned  to 
the  portfolio  of  worthless  fancies  by  the  broker,  who 
never  stops  to  inquire  what  its  true  value  is.  When 
one  of  this  class  of  stocks  goes  up  on  its  merits,  he 
will  be  sure  to  pronounce  it  a  good  sale. 

That  street  franchise  !  what  could  G mean  by 

that  ?  We  visited  a  lawyer's  office  and  called  for  the 
laws  of  the  State  of  New  York,  hunted  up  the  origi- 
nal charter  of  the  Harlem  Railroad  Company,  which 
was  dated  about  forty  years  ago,  but  could  find  no 
street  franchise  granted  by  it.  We  went  to  the  office 


VANDERBILT   MAKES   AN   INVESTMENT.          203 

of  General  S ,  the  counsel  of  the  company,  and 

inquired  if  he  knew  of  any  franchise  granted  to  the 
Harlem  Railroad  Company.  He  knew  no  more  about 
it  than  he  did  about  Numa  Pompilius. 

"All  right,"  said  the  railroad  man.  "All  right," 
responded  the  other  twain.  Within  three  days  we 
found  ourselves  jointly  short  of  eight  thousand  shares 
of  Harlem,  of  which  lot  I  had  three  thousand  at  dif- 
ferent prices,  from  57  to  59.  There  was  one  man 
who  did  not  share  in  the  ephemeral  opinions  which 
prevailed  in  the  stock-market  respecting  Harlem. 

Vanderbilt  always  seems  to  have  held  faith  in  the 
ultimate  value  of  the  stock  as  a  security,  and  had 
been  for  some  years  a  director  in  the  road.  As  he 
was  selling  out  his  steamboats  and  steamships,  he  be- 
gan to  look  about  him  upon  terra  firma  for  invest- 
ments, which  would  make  him  comfortable  in  his  old 
age,  and,  singularly  enough,  he  pitched  upon  Harlem, 
that  fag  end  of  all  the  railway  fancies  leading  appar- 
ently a  precarious  existence,  and  only  tolerated  by 
their  high-mightinesses,  the  Regular  Board  of  Brokers. 

Did  he  do  this  with  the  expectation  of  getting  con- 
trol of  the  stock  so  that  he  could  use  it  as  the  rings 
of  Wall  Street  do?  Not  at  all.  He  bought  it  at  a 
low  price,  in  order  that  he  might  put  into  it  some 
of  his  spare  cash,  as  a  permanent  investment.  In 
1862,  he  was  known  to  be  buying  a  large  amount  of 
the  stock. 

One  day  a  well-known  retired  merchant,  an  inti- 
mate acquaintance,  met  him  and  asked  how  it  hap- 
pened that  he  was  buying  so  much  Harlem.  He 
replied  that  its  sale  at  par  was  only  a  question  of 
time,  and  as  he  had  a  few  millions  lying  idle,  he  was 

13 


204  INSIDE    LIFE  IN   WALL    STKEET. 

putting  some  of  it  into  Harlem, — his  children  would 
reap  the  "benefit  if  he  himself  did  not  live  to  do  so. 

During  the  winter,  the  price  had  been  slowly 
rising,  bringing  up  the  rear  of  all  the  principal  rail- 
ways. In  April,  it  had  jumped  in  a  few  days,  with 
rapid  leaps  to  61,  and  then  fell  back  to  58.  Thus 
it  -stood,  when  the  short  sales  above  recorded,  were 
made.  Within  a  week  after,  the  price  slumped  to  43. 
The  three  thousand  shares  were  bought  in  at  a 
profit  of  $13,000,  and  when  the  price  rose  to  52, 
four  thousand  shares  were  sold  short,  for  my  ac- 
count. The  price  hung  at  from  50  to  54,  for  a  few 
days,  then  sprang  up  to  58,  then  down  to  55,  then 
up  again.  It  seemed  to  have  quicksilver  in  it,  and 
hobbled  up  and  down  without  much  apparent  cause, 
as  though  some  strange  atmosphere  was  at  work  on 
it.  The  stock  was  the  favorite  one  of  the  whole 
catalogue,  and  was  operated  in,  boldly,  both  on  the 
long  and  short  side,  in  amounts  so  large  that  the 
whole  capital  stock  sometimes  changed  hands  in  a 
single  day.  Vanderbilt  was  known  to  be  buying  it 
for  investment,  and  some  of  the  sharp  ones  were 
chuckling  at  the  idea  of  "sticking"  him  with  big 
ajags"  of  it  at  58  and  60.  The  idea  that  he  was 
buying  it  for  investment,  seemed  intensely  funny  to 
the  brokers.  They  sold  it  right  and  left,  in  the  most 
dashing  style,  amid  the  laughter  of  their  associates. 
Still  he  kept  buying  it.  He  appears  to  have  been 
open  and  above  board.  In  these  transactions,  he  re- 
minded one  of  the  tintorea  shark,  of  the  tropical 
seas,  which  announces  its  presence  by  the  phosphor- 
escent atmosphere  in  which  it  is  enveloped ;  its  prey 
is  first  stifled,  and  then  devoured  at  leisure.  And  so 


SOMETHING   NEW   COMING   TO   LIGHT.  205 

it  was  now.  The  Commodore  moved  about  through 
the  turbid  waters  of  the  street,  making  no  secret  of 
his  doings,  and  quietly  absorbing  into  his  vast  finan- 
cial maw,  the  huge  slices  of  Harlem  fed  out  to  him, 
by  the  frolicsome  and  infatuated  bears.  The  singular 
oscillations  of  the  stock,  set  some  people  to  thinking 
there  was  something  more  in  it  than  appeared  on  the 
surface.  Queer-looking  boys,  with  pug  noses,  and 
eyes  that  embraced  you  and  the  opposite  lamp-post 
at  the  same  glance,  were  seen  carrying  notes  with  the 
most  outlandish  orthography,  from  the  City  Hall  to 
the  offices  of  prominent  brokers.  Men  with  strongly 
Celtic  faces  were  seen  on  Wall  Street,  answering  to 
the  names  of  O'Flyn  and  Mac  Murphy,  Sixth- warders 
by  the  cut  of  their  jib,  and  said  to  belong  to  the 
Ancient  and  Honorable  Board  of  Aldermen. 

The  21st  of  April  developed  the  game  with  suffi- 
cient certainty.  On  the  evening  of  that  day  an  ordi- 
nance was  rushed  through  the  Boards  of  Aldermen 
and  Councilmen,  authorizing  the  Harlem  Railroad  to 
lay  a  double  track  through  Broadway  from  Four- 
teenth Street  to  the  Battery.  This  was  in  accordance 
with  the  terms  of  their  amended  charter  of  1832, 
which  vested  in  them  the  right  to  lay  rails  in  any 
street  in  the  city,  subject  to  the  consent  of  the  Mayor, 
Aldermen  and  Commonalty  of  the  city  of  New  York. 
When  we  reflect  that  from  one  to  two  hundred 
millions  of  people  pass  up  and  down  that  roaring 
thoroughfare  every  year,  the  value  of  this  grant  may 
be  estimated.  Successive  generations  of  speculators 
and  lobbymen  had  fought  to  obtain  it  from  every 
legislature  for  tho  preceding  twenty  years,  but  in 
vain;  and  now  by  the  stroke  of  a  pen,  the  Harlem 


206  INSIDE    LIFE  IN  WALL   STREET. 

Railroad  held  it.  The  stock  rose  in  an  hour  from  60 
to  75.  The  bears  were  filled  with  consternation; 
venerable  men,  the  grey  coyotes  of  the  Stock  Ex- 
change, who  had  fattened  on  stock  depressions  and 
panics  for  a  quarter  of  a  century  and  were  now 
heavily  short,  were  seen  wending  their  way  to  the 
offices  of  their  counsel  learned  in  the  law,  to  devise 
legal  means  to  extricate  themselves  from  their  di- 
lemma. The  courts  of  justice  were  invoked  and  a 
shower  of  injunctions  discharged  itself  forthwith  on 
the  Mayor  to  forbid  him  from  ratifying  the  ordinance 
and  on  the  company  to  prevent  their  laying  rails  in 
Broadway.  The  Mayor  disregarded  the  injunction 
under  legal  advice,  and  signed  the  ordinance,  while 
the  other  processes  wended  their  sinuous  way  through 
the  courts. 

But  the  furious  opposition  to  the  grant  from  so 
many  quarters,  had  meanwhile  got  the  Commodore's 
"dander  up."  He  and  his  friends  held  most  of  the 
stock.  They  made  ready  to  twist  the  bears.  Many 
of  this  latter  class  were  men  of  large  means  and 
strong  will.  They  believed  that  the  franchise  scheme 
would  somehow  fail,  whether  in  the  courts  or  in  the 
ensuing  session  of  the  Legislature ;  accordingly  they 
kept  borrowing  the  stock  and  averaging  themselves 
with  commendable  resolution. 

The  upward  movement  was  assisted  by  the  large 
purchases  made  by  Addison  G.  Jerome,  who  drew 
after  him  a  long  train  of  imitators.  Other  members 
of  the  Public  Board  sold  it  short  furiously. 

Now  commenced  a  dance,  such  as  was  never  known 
before  in  the  stock-market — the  rise  in  stocks  known 
as  the  Chancellorsville  rise — which  will  be  hereafter 


WALL    STREET    BLESSINGS   AND    CURSINGS.       207 

described.  Of  all  the  list,  Harlem  moved  the  wildest 
and  most  oddly.  It  pranced  and  capered.  It  had 
wings  and  flew  up  thirty  points,  then  dropped  like  a 
shot  partridge  to  its  starting-place.  It  never  would 
rest.  Bulls  and  bears  blessed  it  and  cursed  it  in 
fierce  chorus  alternately.  It  ruined  the  bulls,  and 
drove  the  bears  to  suicide.  The  Harlem  operator 
was  rich  in  the  morning  and  poor  at  night,  or  vice 
versa. 

Once  when  it  flew  up  to  117, 1  received  a  call  from 
my  brokers  for  $40,000  more  margin,  but  almost 
before  I  had  left  their  offices  in  despair,  it  was  down 
again  to  105,  and  I  was  saved.  During  the  next 
break,  which  carried  it  to  90,  the  four  thousand 
shares,  of  which  I  was  short  at  52 — 55,  was  bought, 
and  my  loss  was  finally  settled  at  something  like 
§75,000.  Thus  ended  a  weary  campaign  of  six  or 
eight  weeks. 

New  views  of  life  in  Wall  Street ! 

Oh!  That  infernal  Harlem!  That  terrible  old 
Commodore ! 

But  this  is  not  the  end  of  Harlem,  nor  of  the  bears. 
Still  up  and  down,  as  the  summer  waxed  hotter.  The 
bears  encouraged  by  occasional  successes,  became 
bolder;  then  they  became  bolder  still,  even  to  reck- 
lessness. Something  was  in  the  wind.  Again,  the 
Celtic  faces,  from  the  City  Hall,  were  seen  on  the 
street.  Again,  the  queer-faced  boys  were  seen  bring- 
ing notes  from  the  Assembly  Chamber  of  the  City 
Fathers.  These  notes  were  all  orders  to  sell  Harlem, 
"  at  any  price,  only  sell  it."  The  Aldermen  and  Coun- 
cilmen  of  the  city  of  New  York  were  selling  Harlem, 
the  pet  of  the  Commodore,  the  life  of  the  street. 


208  INSIDE   LIFE  IN   WALL   STREET. 

Now  it  sinks  slowly,  now  drops  swiftly,  now  it's  up 
again,  no!  it  has  fallen  to  72.  Wherefore? 

The  Common  Council  had  rescinded  the  ordinance 
granting  the  right  to  lay  rails  in  the  streets  of  New 
York!  And  the  stock  fell. 

They  had  played  Vanderbilt  a  trick. 

This  was  late  in  June.  In  three  days  the  price 
stood  105. 

This  action  on  the  part  of  the  Common  Council, 
was  believed  by  the  prominent  holders  of  the  stock 
to  be  of  no  effect.  But  the  bears  undeterred  by  their 
losses,  still  kept  selling  the  stock.  It  vibrated  heavily 
between  90  and  105.  But  some  one  was  always  ready 
to  buy  it,  particularly  when  the  sellers  wished  to  go 
short  of  it.  A  great  hand  was  always  extended  to 
receive  the  stock  and  pass  it  away  out  of  sight,  in  a 
deep,  broad  iron  chest.  The  Commodore  was  biding 
his  time  to  take  revenge  on  the  Legislative  tricksters. 

In  the  latter  part  of  July,  Judge  Brady,  of  the 
Court  of  Common  Pleas,  dissolved  the  injunction,  for- 
bidding the  Harlem  Railroad  to  lay  rails  in  Broadway. 
Then  the  price,  which  had  been  slowly  heaving  and 
collapsing  for  four  weeks,  all  at  once  jumped  to  115, 
amid  the  execrations  of  the  whole  ursine  tribe.  No 
mercy!  Still  up,  120,  125,  130,  140.  The  bears 
loosed  their  hold  by  dozens  as  it  rose.  At  150,  most 
of  them  had  covered.  Some  hard  heads  still  kept 
their  position.  But  when  it  touched  180,  there  was 
not  a  single  man  of  them  left.  As  for  their  losses, 
one  circumstance  will  show  them  more  clearly  than 
any  array  of  figures;  for  months  after  the  event, 
when  any  one  desired  to  say  that  an  operator  was 
irretrievably  ruined,  he  expressed  it  in  a  single 


EXPERIENCES    OF   OPERATING  IN   HARLEM.      209 

phrase,  "he  went  short  of  Harlem."  "What  made 
the  matter  worse  for  these  gentlemen,  many  of  them 
when  they  covered  at  140  and  150,  bought  the  stock 
to  hold  for  200,  and  failing  that  point,  were  caught 
by  the  rebound  in  another  trap,  when  Harlem  fell 
from  180,  not  a  few  of  these  bulls  too  late,  were  of 
the  City  Hall  clique. 

The  ends  of  the  ring  were  now  substantially  and 
for  the  time  being  accomplished.  They  had  sold  out 
the  bulk  of  their  stock  at  prices  ranging  from  140  to 
175;  the  shorts  were  covered.  It  was  decided,  there- 
fore, that  the  stock  should  be  dropped.  Here,  again, 
the  aid  of  the  courts  and  the  municipal  legislative 
bodies  were  invoked  as  hammers  to  smite  the  still 
erect  and  swelling  crest  of  Harlem,  and  reduce  it  to 
its  old  comatose  and  worthless  condition.  A  decision 
of  Judge  Hogeboom,  adverse  to  the  franchise  grant, 
was  first  promulgated;  this  was  followed  by  legisla- 
tion of  the  Common  Council  unfavorable  to  the  rail- 
road company;  the  price  dropped  to  75,  ruining 
almost  as  many  by  its  fall  as  it  had  by  its  rise.  So 
suddenly  did  this  take  place,  that  it  effectually  fin- 
ished the  enthusiastic  outside  holders  of  the  stock, 
nor  were  the  bears,  who  were  sullenly  waiting  for 
their  revenge,  able  to  put  out  any  considerable  line 
of  shorts.  A  few  of  these  latter,  however,  when  the 
stock  was  selling  from  135  to  140,  had  still  sufficient 
nerve  to  sell  a  few  thousand  shares,  three  weeks  after 
which  they  might  have  been  observed  leaning  against 
the  various  lamp-posts,  gorged  and  happy. 

I  had  almost  forgotten  to  say  that  the  600  shares 
of  the  stock  'which  was  bought  at  12,  seventeen 
months  before,  and  which  I  had  held  to  see  what 


210  INSIDE    LIFE  IN   WALL    STREET. 

would  come  of  it,  was  sold  at  140,  with  a  profit  of 
$38,400.  Buy  a  stock  low,  pay  for  it,  hold  it,  and 
finally  sell  it  high.  'Tis  well ! 

Many  amusing  anecdotes  are  told  of  the  singular 
fortunes  of  some  of  the  smaller  operators  during  this 
rise.  Once  a  broken  operator  asked  a  broker  ac- 
quaintance to  buy  him  a  couple  of  hundred  shares,  as 
they  were  standing  in  the  crowd,  just  after  the  fall 
to  72,  which  followed  the  rescission  of  the  grant  by 
the  Common  Council.  The  broker  wedged  his  way 
into  the  crowd  and  bought  the  stock,  but  when  he 
came  out  he  could  not  find  his  impecunious  cus- 
tomer to  report  the  purchase  and  procure  his  margin ; 
during  this  time,  scarcely  sixty  seconds,  the  stock  had 
risen  five  per  cent.  When  the  customer  made  his 
appearance,  he  promptly  gave  the  order  to  sell  it. 
Before  the  sale  could  be  effected,  the  stock  had  risen 
five  per  cent,  higher,  and  the  buyer  had  made  a  thou- 
sand dollars.  This  sum  was  the  foundation  of  a  for- 
tune of  $150,000. 

Another  of  these  strange  pieces  of  luck,  was  that 
of  a  butcher  boy  named  Devoe,  (no  connection  of 
Thomas  D.,  General  Scott's  old  caterer,  in  Jefferson 
Market),  who  had  earned  $400  driving  his  furious 
chariot  at  day-break,  from  the  First  avenue  abattoirs 
to  Fulton  Market.  Overhearing  Alderman  Mullow- 
ney  of  his  ward,  extolling  the  Commodore  and  his 
pet  stock,  and  predicting  an  extraordinary  rise,  he 
became  inoculated  with  the  prevailing  epidemic,  and 
paying  a  visit  to  Wall  Street,  "spouted"  his  $400 
with  a  broker,  as  margin  for  a  hundred  full  shares 
of  Harlem  at  124.  In  five  minutes  it  fell  three  and 
one-half  per  cent.;  $350  of  the  hard  earned  money 


A  FIRST   AND   LAST   VENTURE.  211 

gone !  Devoe  was  in  despair,  which  he  vented  in  the 
most  energetic  expletives  known  to  his  trade  and  place 
of  residence,  which  was,  we  need  not  add,  not  far 
from  Mackerelville.  Just  as  the  order  was  going 
forth  to  sell  him  out,  a  messenger  from  the  Board 
brought  tidings  that  Harlem  was  selling  for  127. 
Devoe  straightened  himself,  smiled  a  sheepish  smile, 
and  doubled  his  interest  in  the  market,  by  taking 
another  hundred  shares.  In  two  weeks  he  drew  out 
$21,000  profits,  of  this  his  first  and  last  venture 
among  the  bulls  of  Wall  Street.  He  is  now  a  flour- 
ishing broker  among  the  bulls  and  other  cattle  who 
graze  amid  the  fertile  bottoms  of  the  Illinois. 

To  recount  the  losses  of  individuals  in  this  cam- 
paign, would  be  a  dreary  catalogue.  Those  of  two, 
only,  need  be  mentioned.  The  baker  instead  of  re- 
tiring from  Wall  Street  with  $100,000,  left  in  the  fall 
with  only  $2,500,  and  returned  to  his  old  trade.  The 
railroad  man  was  more  fortunate ;  he  saved  $40,000, 
but  he  never  sold  short  any  more. 

Let  us  now  return  from  the  tangent  on  which  Har- 
lem has  carried  us  away,  and  see  how  the  general 
market  fared  during  the  spring  and  summer  of  1863. 


CHAPTER  XII. 
THE  BRIGADE  OF  BEARS. 

How  Bulls  are  Changed  into  Bears — The  Short  Gentleman  on  the 
Anxious  Seat— A  Bear-garden  in  William  Street— Office  of  D. 
Groesbeck  &  Co.— David  Groesbeck  the  Pupil  of  Jacob  Little,  and 
the  Partner  of  Daniel  Drew— Portraits  of  Other  Bear-operators— 

Dr.  Shelton — C 's   Fortunes — William  R.  Travers,  the  Partner 

of  Leonard  W.  Jerome — A  Lucky  Hit  on  the  Bear  Side — Anecdotes 
—  The  Marshalling  of  the  Clans— The  Bull-battalion— Lock  wood 
&  Co.,  and  LeGrand  Lockwood— Another  Bull-leader!  Who  is  it? 

(ALL  STREET  operators  commence  their  ca- 
reer as  bulls,  and  finish  it  as  bears.  This  is 
a  general  rule,  to  which,  of  course,  there 
are  many  exceptions.  When  a  man  enters  the  stock- 
market,  he  almost  invariably  operates  for  a  rise. 
But  when  he  sees  how  long  it  takes  for  stocks  to  go 
up,  and  how  swiftly  they  sometimes  fall,  and  more- 
over, when  in  one  of  those  falls,  he  finds  all  the 
profits  of  months  previous  swept  away  in  a  day,  he 
naturally  reasons  that  if,  instead  of  operating  for  a 
rise,  he  had  waited  and  sold  short,  or  operated  for  a 
fall,  he  would  have  acquired  wealth  with  a  haste  com- 
mensurate with  his  desires.  Besides  this,  he  sees 
that  interest  always  runs  in  favor  of  the  bear,  while  it 
forms  one  of  the  heaviest  items  in  the  bull's  account, 
for  it  will  not  have  been  forgotten  that  the  buyer 
pays  and  the  seller  receives  interest  on  all  stock  con- 


A   CHANGE   OF   BASE.  213 

tracts.  It  is  easier  for  a  broker  to  sell  stocks  short 
than  to  carry  them,  and  so  he  is  prone  to  operate  on 
the  bear  side,  and  is  apt  to  encourage  his  customer 
to  act  on  that  side. 

During  the  year  ending  April  1st,  1863,  a  numer- 
ous retinue  of  gentlemen  with  strong  bear  proclivi- 
ties had  been  waiting  for  the  tide  to  turn.  They  had 
had  a  "  hard  road  to  travel "  for  the  twelve  months 
then  last  past.  One  stock  after  another  had  been  tried 
but  only  with  ever  increasing  loss.  The  general  rise 
had  cost  them  money.  Hudson  had  drawn  heavily 
upon  their  purses.  Gold  had  lowered  them  still  more, 
and  Pacific  Mail  had  almost  completed  the  drain. 

Many  of  these  gentlemen  had  been  in  the  street, 
speculating  for  years,  and  had  built  up  great  fortunes 
out  of  the  wrecks  of  panics,  just  as  Christian  churches 
in  Rome  have  been  built  out  of  the  ruins  of  Pagan 
temples.  A  large  number  of  the  members  of  the 
regular  board  of  brokers,  especially  of  the  older 
members,  were  bearishly  inclined,  considering  the 
enormous  and  unprecedent  rise  of  stocks,  and  reason- 
ing from  past  experience  rather  than  from  the  present 
situation  of  financial  affairs.  Some  of  these  broker- 
age houses  thus  affected,  served  as  rallying  points  for 
those  who  thought  they  could  make  money  now  by 
selling  short. 

One  of  these  rallying  points  was  the  house  of  D. 
Groesbeck  &  Co.,  of  which,  Daniel  Drew,  as  already 
mentioned,  was,  and  we  believe  now  is,  a  partner. 
Here  Uncle  Daniel,  for  the  past  eight  years,  has  con- 
ducted his  numerous  and  extensive  operations.  Here 
was  his  head-quarters  and  strong-hold.  Figuratively 
speaking,  it  might  be  supposed  that  it  had  under- 


214  INSIDE    LIFE  IN   WALL   STREET. 

ground  passages,  by  which  mines  were  dug  beneath 
the  enemies'  works,  when  he  was  preparing  for  an 
explosion,  which  should  hoist  the  bulls  on  some  fine 
day  when  they  least  expected  it,  or  that  it  had  para- 
pets, from  which,  a  plunging  fire  of  blocks  of  stock 
could  be  directed  on  the  besiegers,  or  secret  doors 
which  could  be  suddenly  thrown  open,  so  that  the  de- 
lighted eyes  of  the  ursine  garrison  could  gaze  on  the 
pleasing  spectacle  of  a  panic.  On  the  contrary  the 
office  of  this  firm,  which,  in  1863  and  1864,  was  at  No. 
15  William  Street,  was  a  very  peaceful-looking  place. 
Four  little  rooms,  all  so  snug  and  cosy.  In  one  sat  a 
half  dozen  clerks  behind  a  railing,  figuring  or  draw- 
ing checks  and  paying  for  stocks,  or  sending  them 
out  by  two  or  three  mealy-faced  boys.  In  the  little 
room  at  the  side,  customers  were  wont  to  be  consoled 
when  luck  was  against  them,  or  congratulated  when 
the  little  joker  was  jumping  to  their  satisfaction.  A 
short,  ruddy  young  man  (one  of  the  firm)  was  stroll- 
ing about,  and  "talking  horse."  In  the  next  room, 
were  most  of  the  customers  of  the  house,  some  en- 
gaged in  financial  contemplation,  others  in  a  trance, 
wherein  they  seemed  to  see  panics  approaching  with 
a  beatific  vision,  or  perhaps  brooding  over  their  losses ; 
on  the  whole  they  were  just  then  (in  1863  and 
1864)  rather  a  melancholy-looking  crew.  On  the 
sofa  in  the  rear  room,  seated  cross-legged,  was  a 
not  very  handsome,  but  a  harmless-looking  old  gen- 
tleman, in  close  confab  with  some  one  of  the  lights 
of  the  market ;  perhaps  with  Dick  Schell,  or  it  might 
be  Charles  Gould,  or  one  of  the  directors  of  the 
Erie  Railway  Company.  Was  that  Uncle  Daniel  the 
Great  Bear  ?  Yes.  Who  was  that  tall  man  with  a 


DAVID   GROESBECK.  215 

cassimere  sack  coat  on,  who  looked  so  saturnine  and 
gloomy,  as  though  he  was  haunted  by  the  spectre  of 
an  adverse  market?  That  was  David  Groesbeck, 
familiarly  known  among  his  numerous  customers,  as 
Grosy,  and  the  head  of  the  firm.  A  graduate  from 
the  office  of  Jacob  Little,  from  whom  he  learned  the 
art  and  mystery  of  the  stock-trade,  and  inheriting 
his  traditions,  it  was  fitting  that  he  should  be  the 
partner  of  the  great  bear  of  the  last  decade,  and 
the  head  of  the  great  bear  house  of  1863  and  1864. 
For  many  years,  after  starting  in  business  on  the 
street,  he  speculated  on  his  own  account,  and  like 
others,  who,  before  or  since,  have  followed  his  example 
in  that  respect,  failed  several  times.  But  for  the  past 
eight  years,  he  has  stuck  to  the  legitimate  commission 
business,  in  which  he  has  rolled  up  a  large  fortune. 
This  man  is  probably  the  repository  of  more  financial 
secrets,  than  any  other  man  in  the  street.  He  could 
tell,  if  he  chose,  how  it  was  that  Jacob  Little  made 
and  lost  such  vast  sums,  and  by  what  legerdemain 
Daniel  Drew  has  so  often  transferred  to  his  own 
roomy  pockets,  the  cash  lately  in  the  pockets  of  a 
hundred  different  men. 

Personally,  Mr.  Groesbeck  is  a  man  of  a  kind 
heart  and  quick  sympathies.  He  does  not  forget  the 
friends  of  his  early  years,  and  after  the  death  of  his 
old  principal,  Jacob  Little,  he  was  one  of  those  who 
aided  in  collecting  out  of  the  debris  of  a  great  for- 
tune, a  sufficient  sum  to  provide  for  the  family  of 
the  deceased  financier. 

We  would  not  be  understood  to  assert  that  the 
customers  of  this  house  were  necessarily,  or  all  of 
them,  operators  for  a  decline,  or  bears.  Both  sides 


216  INSIDE   LIFE   IN   WALL   STREET. 

of  the  market  were  represented,  and  great  fortunes 
have  been  made,  as  well  as  lost,  in  the  house  of  D. 
G.  &  Co.,  on  the  bull  side.  Nor  would  we  say  that 
the  firm  were  given  to  the  practice  of  advising  their 
customers  to  sell  short.  Still  there  was  an  influence 
there  all  the  time,  working  to  induce  short  sales, 
not  by  persuasion,  advice  or  argument,  it  was  some- 
thing more  subtle  than  these — an  atmosphere  of 
bearishness  which  each  one  breathed,  until  he  took 
on  the  shape  and  action  thereof.  Uncle  Daniel,  the 
bear,  was  the  great  Panjandrum  of  the  house  of  D. 
G.  &  Co.,  and  all  the  little  Joblillies  and  Piccalillies 
patterned  their  operations  after  his. 

This  office  was  the  rallying  point  of  the  bears  in 
1863.  Some  of  the  dealers  there,  afterwards  became 
noted  during  the  great  decline  and  subsequent  rise  of 

1865.  One  of  these  was  Dr.  S ,  sometimes  known 

as  Ursa  Minor,  and  sometimes  known  as  the  "  Retired 
Physician/'  the  golden  sands  of  whose  life  are  not 
yet  by  any  means  run  out.  He  was  then  and  still  is 
a  veteran,  and  a  daring  speculator,  whose  fortunes 
swing  between  zero  and  a  million,  almost  in  the  course 
of  one  revolving  moon.  During  1863,  and  the  first 
three  months  of  1864,  he  sat  watching  his  pile  as  it 
dwindled  away  under  that  process  of  attrition  pecu- 
liar to  the  stock-market,  until  it  only  contained 
$20,000.  But  that  oaken  and  smileless  face  and  still 
tongue  told  no  tales  of  waxing  or  waning  fortune, 
but  in  grim  silence  waited  for  the  wheel  to  come 
round  full  circle.  It  came  in  good  time.  In  the 
spring  of  1865,  he  rose  the  master  of  three-quarters 
of  a  million. 

They  who  loiter  in  the  reading  room  of  the  Fifth 


A   BILIOUS   BEAR.  217 

Avenue  Hotel  will  have,  doubtless,  often  remarked  a 
tall,  atrabilious,  silent  man  sauntering  in  a  purposeless 
way  through  that  apartment,  or  conning  the  financial 
columns  of  the  various  papers  strewed  about.  This 

is  C ,  a  man  who  has  tasted  the  "fierce  extremes" 

of  Wall  Street  life  between  a  plump  million  and 
hungry  impecuniosity.  He  is  and  always  was  a  bear 
by  his  very  constitution  and  habit  of  body.  His 
biliary  system  causes  him  to  look  at  stocks  through 
the  most  cerulean  of  spectacles.  Who  can  tell  how 
much  that  useful,  but  exceedingly  troublesome  organ, 
the  liver,  has  had  to  do  with  success  in  anything  ? 
Napoleon  lost  the  battle  of  Waterloo  through  a  fit  of 
indigestion,  and  C — —  lost  the  battle  in  Wall  Street 
because  his  liver  is  chronically  deranged.  He  is  a 
Pennsylvanian,  and  came  into  the  street  with  a  half 
million  or  so,  which  a  few  successful  operations  on 
the  short  side  in  the  early  part  of  the  war  swelled  to 
twice  the  amount.  But  selling  stocks  short  between 
1863  and  1864  proved  a  losing  business,  and  April  of 
the  latter  year  found  our  friend  among  the  small  fig- 
ures. When  Fort  Wayne  sold  from  153  to  90,  however, 
he  forgot  his  programme  and  bought  largely  of  that 
stock,  selling  it  again  at  125  and  pocketing  a  quarter 
of  a  million,  it  is  said.  Encouraged  by  this  success, 
he  went  back  on  himself  and  his  bear  proclivities, 
became  unconscious  that  he  had  a  liver,  and  for  a  few 
months  was  a  rampant  bull ;  too  late !  too  late !  The 
spring  of  1865  found  him  high  and  dry  on  the  beach. 
But  it  was  deemed  by  some  of  the  magnates  of  Wall 
Street  that  so  valuable  a  customer  ought  to  be  kept 
in  the  market,  and  so  Daniel  Drew's  bowels  warmed 
with  compassion ;  he  sent  for  our  friend  and  told  him 


218  INSIDE    LIFE  IN   WALL    STREET. 

in  his  peculiar  vernacular,  that  a  "  few  sheers  of  Eyrie 

wouldn't  hurt  him."     "  But,"  said  C ,  "  I  have  no 

money  to  buy  them."  "Never  mind  that,"  replied 
Daniel,  "  send  in  five  thousand  shares  to  me,  I'll  take 

care  of  them."      C was,  in  a  few  days  on  his 

legs  again,  with  $50,000  in  his  pocket. 

Joseph  G.  M s,  a  tall,  burly  man,  with  a  small, 

unwinking  eye,  early  connected  with  the  Public 
Board,  was  another  bold  bear  in  1863,  though  he 
occasionally  went  in  strong  as  a  bull.  He,  too,  re- 
trieved his  fortunes  during  the  gold  panic  of  1865, 
and  has  since  been  a  prominent  operator  of  the  Open 
Board,  oftener  on  the  bear  side. 

Up  to  the  passage  of  the  Legal  Tender  Act,  Wil- 
liam R  Travers,  another  leading  operator,  known 
among  his  friends  as  Bill  Travers,  was  to  be  counted 
among  the  bear  brigade.  He  was  formerly  one  of  the 
firm  of  Jerome  &  Travers,  Leonard  W.  Jerome,  who 
has  already  been  described,  being  his  partner,  and  a 
likely  span  of  bold,  shrewd  financiers  they  made. 

Some  years  before  the  commencement  of  the  war, 
this  firm  made  a  great  hit  in  Old  Southern,  at  the 
time  when  it  was  selling  at  from  120  to  140.  It  was 
done  in  this  wise:  The  stock  was  a  favorite  one  then, 
and  was  viewed  as  safe  as  a  government  bond. 
Nearly  everybody  in  the  street  had  a  little,  and  the 
outside  public  speculators,  as  well  as  investors,  were 
long  of  it.  This  created  a  favorable  condition  for 
the  formation  of  a  ring  to  depress  the  stock.  Just 
now,  Jerome  &  Travers  discovered,  either  by  their 
native  shrewdness  or  by  accident,  that  there  had  been 
a  considerable  over-issue,  fraudulently,  or  at  least  ir- 
regularly. Acting  on  this,  with  the  utmost  secrecy 


PORTRAIT  OF  W.  R.  TRAVERS.        219 

and  dispatch,  they  put  out  all  the  short  contracts 
they  could  arrange  for,  and  then  sprung  the  mine. 
When  the  news  of  the  over-issue  had  been  communi- 
cated to  the  street,  the  stock  fell  heavily,  from  fifty 
to  sixty  per  cent,  and  the  profits  of  the  sharp  oper- 
ators were  enormous — rated  by  some  as  high  as  a 
million  and  a  half. 

The  portrait  of  Travers  is  familiar  to  the  stock- 
dealing  public.  A  tall,  slender  man,  with  a  rubicund 
face  and  a  jolly  nose,  never  smiles,  and  speaks  with  a 
pronounced  stutter.  Long  since,  I  saw  him  while  stand- 
ing on  the  curb-stone,  buying  some  stock  of  a  dealer 
whose  countenance  bespoke  his  descent  from  Shem. 
"What  is  your  n-n-name?"  inquired  T.,  of  the  He- 
brew. "Jacobs,"  replied  the  seller.  "But  what  is 
your  c-c-christian  name?"  asked  T.,  whereat  the 
crowd  was  convulsed.  But  T's  head  is  as  clear  as  a 
quill.  He  is  constantly  figuring.  His  lips  move  as 
he  walks  the  streets.  When  he  sits  down  in  the 
circle  of  his  family  he  is  still  figuring,  j,  £,  187, 
Central  consolidated  96.  He  bears  the  reputation  of 
an  honorable  business  man,  a  kind  friend.  His  judg- 
ment is  called  in  often  to  decide  bets,  and  on  the 
turf  he  rates  A.  1,  being  President  of  the  American 
Jockey  Club.  His  rate  on  'Change  is  from  two  to 
three  millions. 

Previous  to  his  entrance  into  the  street,  he  resided 
and  did  business  in  Baltimore,  where  he  married  a 
daughter  of  Reverdy  Johnson.  His  Southern  affilia- 
tions, as  well  as  his  own  judgment,  taught  him  that 
the  war  between  the  sections  was  to  be  long  and 
bloody,  and  he  was  among  the  first  to  understand  its 
effect  in  Wall  Street.  At  least,  as  early  as  the  first 
u 


220  INSIDE    LIFE  IN   WALL    STREET. 

months  of  1862,  he  predicted  the  future  course  of 
the  market,  and  a  vast  enhancement  of  values. 
About  that  time  he  met  an  acquaintance,  on  a  ferry- 
boat, and  the  conversation  turning  on  stocks,  then 
very  much  depressed,  asked  what  he  was  doing,  and 
how  much  money  he  had  to  speculate  with.  He  re- 
plied that  he  had  about  six  thousand  dollars  unem- 
ployed, but  dared  not  invest  it,  in  those  uncertain 
times.  "Then,"  said  Travers,  "buy  Governments, 
Erie,  or  anything  else  you  please.  When  they  ad- 
vance, sell  them,  and  buy  as  much  more  as  you  can, 
and  don't,  above  all  things,  go  short  of  a  share."  Act- 
ing on  this  advice,  he  bought  and  is  now  a  rich  and 
flourishing  broker. 

Occasionally,  however,  during  the  rises  of  1863 
and  1864,  Travers  would  take  a  turn  on  the  bear 
side,  and  often  showed  great  judgment  and  skill  in 
these  operations,  running  against  the  general  up- 
ward tide. 

The  ranks  of  the  bears  were,  in  the  spring  of  1863, 
recruited  from  those  who,  during  the  past  year,  had 
been  operating  for  a  rise  and  had  made  great  fortunes 
by  so  doing.  They  had  gone  with  the  current  up- 
wards, and  now  deeming  that  its  force  had  been  "  dis- 
counted," and  remembering  their  old  bearish  habits, 
hoped  to  swell  their  already  bloated  purses  by  de- 
scending on  the  same  current  when  it  culminated  and 
began  to  flow  downward.  The  next  great  rise,  said 
they,  and  we  will  turn  about  and  resume  our  old 
practice  of  selling  short.  But  their  time  was  not 
yet  come.  The  years  1863  and  1864  were,  in  Wall 
Street,  a  disastrous  period  for  all  those  who  operated 
for  a  decline  in  stocks.  The  strength  of  the  street 


THE   BULL-BATTALION.  221 

in  money,  numbers,  talent  and  enthusiasm  was  in 
great  majority  on  the  side  of  the  bulls. 

No  one  who  has  operated  in  Wall  Street,  will  have 
failed  to  remark  how  wonderfully  the  spirits  and  force 
of  the  market  are  stimulated  by  the  rise  of  one  or  two 
leading  stocks,  when  the  rest  of  the  market  is  halting 
and  uncertain  in  its  movements.  So  it  was  in  the 
early  part  of  1863,  when  Pacific  Mail  jumped  sixty 
per  cent,  upwards;  the  courage  of  the  bulls  was" for- 
tified by  this  to  an  amazing  extent.  The  bears, 
however,  in  April,  stood  sulky  and  obstinate,  rather 
strengthened  in  their  resolution,  by  what  to  them, 
savored  of  insanity.  This  was  only  the  beginning. 
They  were  soon  to  "  blench  and  grow  pale "  at  the 
very  name  of  Harlem,  and  a  new  general  rise  was 
already  being  engineered,  before  which  all  former 
rises  in  Wall  Street  should  sink  into  insignificance. 

Outside  of  the  two  rival  boards  of  brokers,  stood 
Commodore  Vanderbilt,  Henry  Keep,  Leonard  W.  Je- 
rome, etc.,  and  backed  up  by  a  long  file  of  capitalists 
who  followed  their  lead,  and  believed  in  their  policy. 
The  Public  Board  led  on  by  A.  G.  Jerome  and  John  M. 
Tobin,  focalized  into  one  burning  center  the  scattered 
rays  of  speculation  from  every  quarter.  While  in 
the  more  conservative  regular  board,  there  were  en- 
terprising and  sagacious  firms  who  were  considered 
the  exponents  of  the  bull  feeling,  as  strongly  as  the 
house  of  D.  Groesbeck  &  Co.,  were  of  the  bear  feel- 
ing, in  the  market. 

Among  these  was  the  firm  of  Lockwood  &  Co., 
which,  from  its  wealth,  its  long  and  high  standing, 
and  its  business  affiliations,  stood  out  in  1863  and 
1864,  not  only  as  the  rival  of  D.  Groesbeck  &  Co., 


222  INSIDE    LIFE  IN  WALL    STREET. 

in  competing  for  the  business  of  the  street,  but  as 
being  almost  as  pronounced  in  its  bull  proclivity  as 
the  latter  was  in  its  bearish  policy.  Its  business,  of 
course,  was  large  and  various  on  both  sides,  but  more 
on  the  bull  side. 

Le  Grand  Lockwood,  the  head  and  founder  of  the 
house,  was  in  personal  appearance  the  antipodes  of  D. 
Groesbeck.  A  .short,  rather  stout  gentleman,  with  a 
face  unworn  and  almost  youthful,  after  twenty-five  or 
thirty  years  of  that  wearing,  tearing,  terrible  Wall 
Street  life.  He  was  a  native  of  Connecticut  and 
brought  into  his' business  all  the  thrift  and  keenness  of 
that  most  thrifty  and  shrewd  of  States.  His  financial 
views  were  generally  large  and  sound.  The  commis- 
sion business  done  by  his  firm  during  the  war,  was 
something  unprecedented  in  the  annals  of  the  street. 

But  it  was  reserved  for  another  man  to  earn  the 
title  of  the  bull-leader  in  the  regular  board,  during 
1863  and  part  of  1864. 

His  operations  constitute  a  distinct  and  memorable 
chapter  in  the  stock  speculation  of  those  two  years. 


CHAPTER  XHL 

ANTHONY  W.  MORSE  AND  THE  CHANCELLORSVILLE 
RISE. 

The  First  Game  of  "  Brag  "  in  the  Village  of  Hanover — "  The  Boy 's 
the  Father  of  the  Man  " — First  Appearance  of  Morse — Wall  Street 
Men's  Wives— Getting  Ready  for  a  Twist— The  Ursine  Vocabulary 
— A  Vindictive  Bear  Going  Short  of  Pittsburg — Waiting  for  News 
from  the  Front — Chasing  a  Telegram — The  Hook-nosed  Man  Nurs- 
ing the  Market — Sounding  the  Charge  Along  the  Whole  Line — The 
Second  Game  of  "  Brag  "—Raking  in  the  Profits— $113,500  in  My 
Right  Boot-leg,  and  No  Money  to  Pay  for  My  Dinner. 

E   summer's   day,  about   twenty-five  years 
since,  in  the  pleasant  village  of  Hanover,  in 
the  old  Granite  State,  celebrated  for  its  seat 
of  learning — Dartmouth  College — and  for  its  placid 
scenery  of  mountain,  vale  and  river,  four  boys   in 
their  teens,  were  squatted  on  the  green  sward  behind 
a  tree  in  the  outskirts,  playing  a  game  of  cards.     It 
was  the  game  of  "  brag,"  so  called,  which  some  graceless 
collegian  from  the  West  had  taught  them  in  an  hour 
of  idleness.     The  young  scape-graces  had  each  con- 
tributed a  copper  penny,  and  thus  made  up  a  "pool," 
the  stake  they  were  playing  for.     One  of  these  boys 
had  a  face  somewhat  besmirched  by  recent  fistic  com- 
bats, but  his  eyes  and  nose  were  like  those  of  a  hawk. 
He  far  surpassed  his  companions  in  that  boldness  and 
address  requisite  to  a  successful  playing  of  the  game. 
He  won  the  stake  every  time.     "  The  boy's  the  father 


224  INSIDE    LIFE   IN   WALL   STREET. 

of  the  man."  Fifteen  years  later,  that  boy,  then  a 
man,  made  his  appearance  in  Wall  Street,  where  the 
game  of  "brag"  is  played  all  the  time  on  a  great 
scale  and  around  a  crowded  table.  His  name  was 
Anthony  W.  Morse.  He  came  into  the  market  as  an 
adventurer,  like  so  many  of  his  fellows.  He  had 
little  money  or  credit,  but  (which  was  as  good  as 
either),  he  was  a  member  of  the  board  of  brokers  in 
1862,  when  the  inflation  began  to  take  place.  The 
name  of  the  firm  which  he  represented,  was  Morse 
&  Co.  Who  were  the  separate  members  of  this  firm  ? 
What  were  their  names  ?  It  appeared,  on  investiga- 
tion, that  the  only  person  composing  the  firm,  bore  the 
Christian  name  of  a  woman  instead  of  a  man.  It  was 
the  wife  of  A.  W.  Morse,  who  was  buying  and  selling 
stocks;  her  husband  was  her  agent  and  broker.  This 
drew  forth  severe  criticism  from  his  associates.  The 
making  of  a  financial  convenience  of  a  wife  is  an  old 
device  of  the  stock-market.  The  Wall  Street  man's 
wife  is  often  a  lady  of  substance.  She  carries  bags 
of  gold  coin  under  her  crinoline ;  certified  checks  are 
quilted  into  her  skirts.  She  hides  notes  of  hand  and 
stock  certificates  in  her  bosom,  and  sails  down  Fifth 
Avenue  with  gems  worthy  of  a  duchess,  entangled  in 
her  hair,  while  her  husband,  panic-smitten  and  money- 
less, limps  up  and  down  Wall  Street 

Who  would  have  picked  out  from  among  the 
brawny  shoulder-hitters  of  the  market,  that  slight, 
boyish  figure,  as  the  bull-leader  of  the  regular 
board  ?  This  man,  the  casual  observer  would  say,  is 
an  English  Jew,  who  has  gone  into  the  business  of  a 
note  broker.  He  always  reminded  us  of  a  man  who 
was  playing  a  part,  and  rather  a  farcical  part  at  that, 


A.   W.   MORSE   PLAYS   "BLUFF."  225 

as  he  came  jauntily  out  into  the  crowd  to  take  a  sur- 
vey of  the  market.  But  he  had  not  forgotten  the 
game  of  brag  which  he  had  played  when  a  boy.  and 
he  was  making  ready  to  play  it  with  a  vengeance. 

A  few  bold  operations  on  the  bull  side  had  put  two 
hundred  and  fifty  thousand  dollars  into  his  pocket, 
and  in  the  spring  of  1863  he  cast  about  him  for  some- 
thing to  make  a  good  stroke  in,  after  the  Wall  Street 
cornering  fashion.  Nothing  offered  better  than  Pitts- 
burg.  It  was  a  small  stock,  only  $4,000,000,  and 
could  be  readily  handled;  its  earnings  were  such  as 
to  justify  the  expectation  of  a  speedy  dividend,  and 
less  than  half  of  the  stock  was  floating  about  the 
street.  The  market  price  ranged  from  65  to  70.  He 
commenced  to  buy  it.  The  act  to  increase  the  legal 
tenders,  by  a  new  issue  of  four  hundred  millions, 
passed.  He  bought  more.  Money  grew  easier,  first 
6,  then  5,  then  4  per  cent.  He  borrowed  money  on 
the  stock  he  had  already  bought,  and  with  this  money 
bought  more  largely.  Stocks  moved  languidly  up- 
wards. 

Suddenly  the  money  rate  tightened  to  7  per  cent, 
and  stocks  dropped  to  their  old  place.  General 
Hooker  had  been  lying  for  months,  with  the  "  finest 
army  on  the  planet,"  watching  the  heights  of  Fred- 
ericksburg,  the  slaughter-ground  of  the  December 
preceding.  A  dark  rumor,  hardly  yet  breathed,  but 
believed  in,  told  every  one  that  another  great  mili- 
tary movement  would  soon  be  made.  Capital  grew 
timorous,  and  called  in  its  forces.  Money  was  scarce, 
but  only  for  a  brief  season. 

The  greenbacks,  which  poured  by  the  hundred 
million  into  the  sub-treasury,  were  poured  out  again, 


226  INSIDE    LIFE   IN   WALL   STREET. 

to  pay  the  government  creditors.  Money  flowed  in- 
to the  stock-market,  in  a  full  steady  stream.  The 
interest  rate  fell  once  more.  Stocks  moved  upwards 
in  earnest. 

Wall  Street  had  already  decided  in  its  mind,  that 
the  spring  campaign  on  the  Rappahannock,  would  be 
disastrous.  The  sequence  to  this  would  be  a  great 
rise  in  values. 

Stocks  were  moving  up,  one  by  one,  after  their  an- 
cient custom,  but  slowly  as  yet  when  I  met  J.  F 

It  was  about  the  middle  of  April,  on  the  brink  of 
the  coal-hole,  while  the  market  was  lagging,  and  the 
doubtful  condition  of  things  looked  just  then  doubly 

uncertain.  J.  F was  the  most  plantigrade  of 

bears.  The  panic  of  1857,  had  changed  him  from 
an  operator  for  a  rise,  into  an  operator  for  a  fall. 
For  six  years  he  had  kept  his  eyes  fixed  on  the  rises 
and  falls  of  stocks,  and  now  they  haunted  him.  He 
presented  a  singular  psychological  phenomenon — a 
distinct  phase  of  the  mania  for  speculation.  He  had 
got  to  look  upon  the  market  as  a  live  thing — a  fan- 
tastic monster.  He  spoke  of  it  as  of  the  feminine 
gender.  "She  rises."  "She  falls."  He  seemed  to 
think  of  it  as  a  debter  which  owed  him  money.  It 
was  a  question  of  revenge,  however,  with  him,  more 
than  money.  He  hungered  for  revenge  for  his  losses. 
His  operations  were  undertaken  in  a  spirit  of  vin- 
dictiveness  against  every  stock  in  which  he  had  lost. 
When  he  made  a  lucky  hit,  he  would  flourish  certified 
checks,  and  boast  like  an  Indian  brave  over  the 
scalps  which  he  had  taken  from  an  enemy. 

For  nearly  a  year  he  had  hardly  kept  himself  from 
ruin,  but  when  gold  lurched  and  went  down  in  March, 


A   CONSTITUTIONAL  AND   VINDICTIVE   BEAK.     227 

he  went  down  with  it  and  came  again  to  the  surface 
with  $30,000  in  his  hand,  which  he  waved  aloft  in 
triumph,  and  now  stood  ready  for  another  plunge  into 
the  vortex  of  a  stock-panic. 

"How's  the  market,  F ?" 

"  Barely,  steady ! " 

Somehow,  the  market  is  never  more  than  "barely 
steady"  to  the  constitutional  bear.  When  it  is  dull, 
he  quotes  it  "soft,"  which,  in  his  vocabulary,  means 
declining,  or  in  a  condition  suitable  to  be  depressed. 
When  it  is  rampant,  then  it  is  "just  on  the  verge  of 
a  severe  break,"  and  when  its  tendency  is  upwards,  it 
is  only  "barely  steady." 

"How  is  money,  to-day?" 

"Easy  enough,  but  what's  money  got  to  do  with 
it?"  "I've  known  many  a  panic  on  an  easy  money 
market."  This  is  a  favorite  saying  among  the 
bears. 

"  Yes,  and  I've  known  stocks  go  up  on  a  tight 
money  market,"  said  an  old  gentlemen  who  just  that 
minute  joined  us,  and  was  evidently  operating  on  the 
bull  side. 

"  This  market  must  go  down,"  said  F . 

"Why?" 

"  Because  stocks  are  selling  too  high." 

"  D'ye  think  so,  for  money?"  inquired  the  old  gen- 
tleman. 

"I'll  bet  a  hundred  that  Cleveland  and  Pittsburg 
sells  at  50  before  it  sells  for  par,"  replied  F . 

"Put  up  your  money,  then." 

This  having  been  done,  F proceeded  to  hold 

forth  at  length  on  the  subject  of  the  inflated  condi- 
tion of  the  market. 


228  INSIDE    LIFE  IN   WALL    STREET. 

"Has  Daniel  Drew  made  any  money  lately,  selling 
short?"  asked  the  old  gentleman,  banteringly. 

"Never  mind  Daniel  Drew,"  retorted  F ,  "he'll 

eat  you  all  up  yet." 

"Now  you've  been  talking  about  this  Pittsburg 
stock,  I'll  take  a  thousand  shares  at  75,  buyer  thirty," 
quietly  remarked  the  old  gentleman. 

F 's  face  writhed  and  curled  like  a  dog  about 

to  nip  the  leg  of  a  beggar.  "I'll  sell  it  to  you," 
snarled  he. 

"Sell  me  a  thousand  shares, buyer  thirty,  F ?" 

inquired  I. 

He  wheeled  around,  and  shaking  his  fist  in  my  face 
as  if  he  had  some  special  grudge  against  me,  which 
he  wished  to  indulge  by  selling  me  a  thousand  Pitts- 
burg,  thundered  "  yes !  " 

"Thirty  per  cent,  up,  in  the  Trust  Company?" 

"Thirty  per  cent,  up  in  the  Trust  Company,  by 
both  parties,"  he  screamed,  "  and  right  away,  too." 

The  buyer  and  the  seller  have  the  right  to  demand 
from  each  other  a  sum  ranging  from  ten  per  cent, 
upwards,  to  secure  the  bargain.  This  sum  or  margin 
is  generally  deposited  in  the  hands  of  some  corpora- 
tion or  responsible  firm,  who  thus  become  the  stake- 
holders and  pay  over  the  money  to  the  party  who 
wins. 

Two  thousand  shares  of  Pittsburg  at  75,  is  $75,000, 
for  this  stock  is  like  Harlem,  only  $50  per  share  at 
par. 

We  went  together  to  the  Trust  Company.  J.  F 

put  up  in  the  Trust  Company,  $30,000.  The  old 
gentleman  put  up  $15,000,  and  I  put  up  $15,000,  all 
in  certified  checks.  Then  we  parted.  The  old  gen- 


A  TELEGRAM  FROM  THE  FRONT.       229 

tleman  took  an  omnibus  up  town,  with  a  serene  smile 
playing  on  his  venerable  features  at  the  thought  of 

his  Pittsburg.  J.  F passed  down  William  Street 

with  the  air  of  a  man  who  had  inflicted,  or  was  about 
to  inflict,  a  terrible  revenge  on  his  old  enemy  Pitts- 
burg,  and  joined  a  group  of  sad  but  determined  look- 
ing men,  who  belonged  to  the  bear  brigade  and  used 
to  stand  in  front  of  the  office  of  D.  Groesbeck  &  Co. 

During  the  two  weeks  then  next  ensuing,  it  was 
amusing  to  watch  the  goings,  comings  and  general 
looks  of  the  bear  brigade.  Every  pleasant  morning 
they  could  be  seen  roosting  on  the  iron  railings  in 
William  Street,  and  sunning  themselves,  or  standing 
like  lay  figures  around  the  inside  entrance  to  the 
regular  board.  First  they  were  loud-mouthed  in  their 
predictions  that  the  market  was  just  on  the  eve  of 
panic.  Then,  as  the  prices  rose,  they  grew  stiller,  and 
finally  subsided  into  a  sulky  silence.  , 

May  was  now  come.  Hooker  and  the  grand  army 
were  across  the  Rappahannock.  Stocks  were  up 
ten  per  cent.,  but  were  just  then  halting,  as  if  wait- 
ing for  something.  What  was  it?  News  from  the 
front. 

Passing  down  Wall  Street,  about  noon,  one  day,  I 

saw  a  well-known  operator  named  L ,  rush  out  of 

the  telegraph  office,  holding  a  paper  ribbon  which  he 
gathered  up  into  a  wad  as  he  ran.  I  plucked  him  by 
the  sleeve  as  he  flew  past  me,  and  asked  what's  the 
row  ?  He  mumbled  something,  broke  away  from  me, 
jumped  down  into  a  broker's  office  in  the  basement 
corner  of  William  Street,  reappeared  in  an  instant, 
and  darted  off  the  street  into  the  tunnel  which  led 
to  the  regular  board. 


230  INSIDE    LIFE  IX   WALL    STEEET. 

What  news  could  he  have  ? 

I  followed  him  closely  and  came  up  with  him  as  he 
was  giving  an  order  to  his  broker,  whom  he  had  called 
out  from  the  board  which  was  then  in  session. 

"  What's  up,  L ?" 

He  drummed  against  the  wall  with  his  boot-heel 
and  looked  knowing,  but  kept  his  mouth  shut. 

His  broker  shortly  made  his  appearance  and  handed 

L a  memorandum,  telling  him  that  he  had  bought 

for  his  account,  one  thousand  Erie  and  five  hundred 
Hudson. 

L now  informed  me  that  he  had  news  from  the 

front.  Hooker  was  this  side  the  Rappahannock.  The 
campaign  was  over.  Stocks  must  go  up.  "If  you 
buy  anything,"  added  he,  "let  it  be  Erie  and  Hud- 
son." 

"  How  about  Pittsburg?" 

"  Good !  You  can't  help  making  money,  only  buy, 
buy !  buy !  go  it  blind.  Pitch  in  your  greenbacks  and 
pick  up  gold." 

I  bought  straightway  three  hundred  Erie  and  five 
hundred  Hudson. 

The  news  from  the  front  was  already  known  to 
others,  and  they  were  acting  on  it.  The  market 
hummed  like  a  bee-hive.  Erie  rumbled  along  up 
the  declivity.  Hudson  flew  up.  Harlem  tumbled 
up.  Pittsburg  skipped  up  gaily.  My  profits  were 
rolling  up  at  the  rate  of  $1,000  an  hour.  But  my 
losses  on  Harlem,  of  which  I  was  short,  as  already 
told,  swallowed  up  my  profits.  I  kept  buying  Erie, 
Pittsburg,  Hudson. 

The  neglected  stocks  which  had  lain  lifeless  at  the 
foot  of  the  list,  now  began  to  show  life  and  dance 


A.  W.   MORSE   LEADING   THE    CHARGE.  233 

about  like  Fantocinni  in  a  showman's  box.  Terre 
Haute  "was  a  good  thing  to  buy,  cheap  as  dirt!" 
so  said  my  broker.  I  bought  four  hundred  shares, 
and  before  night  it  danced  up  ten  points. 

Meanwhile,  one  hooked-nosed  man  was  observed  to 
be  very  busy.  In  his  office,  he  was  packing  away 
certificates  of  Pittsburg  stock  in  a  little  black  box, 
or  inclosing  them  in  portly  brown  envelopes.  He 
was  closeted  with  attenuated  cashiers  in  bank  parlors 
looking  after  his  loans.  He  was  nursing  the  general 
market,  hovering  over  it  broodingly,  inquiring  with 
solicitude  after  its  welfare.  But  Pittsburg  was  his 
pet,  and  he  had  gathered  it  under  his  wing.  When 
it  was  weak,  he  stimulated  it.  When  it  was  halting 
and  hesitating  he  coaxed  it  and  drove  it  alternately. 

Many  of  those  who  had  bought  stocks  at  a  lower 
figure,  now  sold  out,  and  realized  their  profits.  The 
market  yielded  gracefully  to  this  pressure;  paused 
for  a  day  ready  to  absorb  anything  in  the  way  of  a 
short  sale  or  any  small  favors  from  those  who  thought 
of  taking  their  profits.  Then  its  ranks  were  re- 
formed; the  hook-nosed  man  waved  his  baton,  and 
sounded  the  charge.  The  whole  line  moved  up  in  a 
twinkling  to  the  top  of  the  declivity.  Erie  from  70, 
had  touched  110.  Hudson  from  105,  had  touched 
142 ;  and  Pittsburg  from  68,  had  touched  108. 

It  is  one  thing  to  "get  stocks  up,"  as  they  say,  but 
quite  another  to  sell  them  at  the  high  price. 

"Now,  who  is  going  to  buy  your  high-priced 
stocks?"  shouted  the  bear  brigade. 

This  inquiry  seemed  very  pertinent.  Upon  that 
hint  I  acted,  giving  orders  to  sell  everything  I  held 
at  the  market  price,  and  notifying  J.  F that  I 


234  INSIDE    LIFE  IN  WALL   STREET. 

was  about  to  sell  the  Pittsburg  (I  had  bought  of  him 
at  75),  and  thus  transfer  $12,000  of  his  money  into 
my  pocket. 

But  how  did  the  hooked-nosed  man,  alias  A.  W. 
Morse,  succeed  in  working  off  his  Pittsburg?  He 
played  the  old  game  of  brag.  Everything  assisted 
him  in  this.  Money  easy  as  an  old  shoe,  the  bears 
tremblingly  eager  to  cover,  the  men  who  had  sold  out 
at  a  lower  figure  now  crazy  to  buy  back  their  stocks 
at  a  higher  figure,  the  whole  market  looking  as  if  it 
never  would  break  again. 

The  prices  which  had  been  galloping  up  for  ten 
days  now  closed  the  heat  with  a  rush.  When  Pitts- 
burg was  struck  on  the  morning  call,  Morse  jumped 
into  the  center  of  the  crowd  and  yelled  at  the  top 
of  his  voice,  "I'll  give  105  for  the  whole  capital 
stock  (about  $4,000,000,),  or  any  part.  I'll  give  100, 
seller  one  year,  for  the  whole  capital  stock  or  any 
part."  He  bluffed  the  whole  board.  No  one  took 
him  up  on  his  liberal  offers.  But  while  he  was  hold- 
ing up  the  market  price  by  making  these  magnani- 
mous propositions,  his  agents  were  busily  at  work 
selling  Pittsburg  quietly  on  every  side.  The  bears 
bought  it  to  cover  their  contracts,  the  bulls  bought 
it  for  a  new  profit ;  in  twenty-four  hours  the  bulk 
of  what  he  held  had  been  worked  off  at  from  97 
to  105.  He  had  raked  in  as  his  winnings  about  half 
a  million. 

.  The  movement  having  culminated,  and  the  heavy 
holders  having  sold  out,  the  market,  as  usual,  took  a 
turn  now  in  the  other  direction.  There  are  always 
pretexts  offered,  for  any  course  which  stocks  may 
take.  They  had  just  risen,  because  Hooker's  cam- 


A   HANDSOME    EXHIBIT.  235 

paign  had  been  a  failure,  just  as  they  had  fallen  when 
the  McClellan  campaign,  the  year  before,  had  been  a 
failure.  Now  they  fell  again,  on  the  news  that  Grant 
had  achieved  some  successes  on  the  Mississippi.  Such 
are  the  sapient  reasonings  of  Wall  Street.  The 
bankers  called  in  their  loans,  money  became  scarce, 
the  weak  holders  were  weeded  out,  and  everybody 
was  figuring  up  the  column  of  profit  and  loss. 

This  was  our  pecuniary  situation,  in  round  num- 
bers, on  the  15th  of  June,  1863,  after  deducting  all 
losses  on  Pacific  Mail,  Harlem,  etc. 

Profits    on    Hudson,    including    the    100    shares   bought 

at  78 $38,000 

Terre  Haute,      ." 3,500 

Pittsburg,  bought  at  75,  of  J.  F., 12,000 

Erie, 11,000 

Sundries,  including  Harlem,  bought  at  12, 49,000 

$113,500 

This  sum  came  into  my  hands  in  the  form  of  checks, 
all  elegantly  lithographed,  signed  by  different  brokers 
with  whom  I  had  kept  accounts,  and  duly  certified 
as  good  by  the  banks  on  which  they  were  drawn. 
These  pleasing  evidences  of  property  were  forth- 
with rolled  into  a  wad,  and  consigned  to  an  inner 
pocket. 

I  stood  in  a  delicious  reverie  on  the  steps  of  the 
Bank  of  America. 

"Have  a  hack?"  said  an  insinuating  voice  at  my 
elbow. 

"I  will  have  a  hack." 

The  hackman  held  open  the  door  of  a  dilapidated 
looking  vehicle.  I  stepped  in  and  lay  back  on  the 
cushions. 


INSIDE    LIFE   IN   WALL    STREET. 

"Where  to?"  said  the  Jehu,  touching  his  hat  in 
military  style. 

"Drive  me  — —  up  town." 

Takino-  the  checks  out  of  my  pocket,  I  contempla- 
ted them  fost  sideways,  then  front,  then  upside  down. 
Was  it  a  dream?  $113,500!  there  it  was,  in  real 
green  and  black  letters  and  figures !  It  ought  to 
have  been  $200,000,  and  would  have  been  but  for 
those  confounded  losses  on  Harlem  and  Pacific  Mail. 
Still,  here  was  wealth,  and  what  was  better,  freedom ; 
freedom  from  the  life  of  a  speculator — freedom  to 
do  what  I  pleased,  and  to  go  where  I  pleased.  Ah ! 
there  is . 

These  contemplations  were  rudely  broken  in  upon 
by  my  Jehu,  who  had  stopped  in  front  of  Delmonico, 
corner  of  Fourteenth  Street  and  Fifth  Avenue. 

"  Beg  pardon ;  but  I  thought  as  you'd  been  making 
some  money  off  'em,  you'd  like  to  stop  here,  sir." 
How  did  he  know  I'd  been  "making  some  money 
off  'em?"  He  must  have  seen  me  handling  my 
checks.  Hide  your  money,  said  caution.  I  took  it 
out  and  tucked  it  in  my  right  boot-leg.  It  began  to 
worry  me,  already.  Not  that  I  had  the  sum  of 
$113,500  on  my  person,  because  it  was  in  unendorsed 
checks,  which  if  lost  or  stolen,  would  do  nobody 
any  good  but  myself.  No,  it  was  the  mere  fact  that 
I  possessed  so  much  money,  that  began  now  to  op- 
press me  like  a  burden  which  a  man  has  suddenly 
shouldered. 

I  entered  Delmonico's,  and  sat  down  at  a  table. 
The  walls  seemed  to  be  all  written  over  with  figures, 
113,500!  113,500!  on  every  side.  I  thought  I  saw 
a  label  before  me  with  113,500  written  on  it.  It  was 


RICHES   IN   PLENTY,  BUT   NO  MONEY.  237 

the  paper  placed  before  me  by  the  waiter  on  which 
to  write  my  dinner  order.  I  muttered  "  113,500."  I 
looked  up ;  the  waiter  was  smiling  as  hard  as  is  con- 
sistent with  the  gravity  of  a  servitor  of  Delmonico. 
I  recollected  myself  and  put  my  hand  in  my  pocket 
to  present  him  with  fifty  cents,  as  a  pour  boire,  when 
it  flashed  across  me  that  I  hadn't  a  cent  of  money — 
nothing  but  certified  checks !  No  money  to  pay  my 
hack-hire  or  buy  my  dinner,  or  even  to  fee  the  waiter. 
Nothing  but  $113,500  in  certified  checks.  I  had  to 
get  the  hack-man  to  trust  me,  and  "  ran  my  face  "  for 
a  dinner  that  day;  but  this  is  not  very  difficult  in 
New  York  at  any  time,  especially  when  a  man  is 
backed  by  that  peculiar  moral  force  produced  by  the 
proud  consciousness  that  he  has  carefully  tucked  away 
the  sum  of  $113,500  in  certified  checks  in  his  right 
boot-leg. 
15 


CHAPTER  XIV. 
"WHAT  WILL  HE  DO  WITH  IT?" 

The  Life  of  an  Operator;  Excitement  and  Repose — In  Pursuit  of 
Happiness  Furiously — The  Terrestrial  Paradise  of  a  Money  Win- 
ner—The Delights  of  the  Eye  and  the  Pride  of  Life— Two  Com- 
rades in  Luck — "Is  this  Happiness?" — Birds  of  Passage  on  the 
Wing  to  Long  Branch— Wall  Street  at  the  Watering  Places 
— Dowagers,  Damsels  and  Dunderheads — Saratoga  the  "  Sweet 
Boon  "  to  the  Broker — The  Congress  and  Court  of  Vanderbilt,  and 
the  Other  Money  Kings — They  Spell  S-t-o-c-k-s,  and  then  They 
Buy  Them — A  Good  Resolution  in  Danger  of  Being  Broken — Ope- 
rating by  Telegraph — "  Once  More  Upon  the  Waters,  yet  Once 
More  and  the  Stocks  Bound  Beneath  us  like  a  Steed  that  Knows  its 
Rider  " — Grasp  the  Substance  ere  the  Shadow  Fade. 

IHE  life  of  the  Wall  Street  man  is  like  that  of 
savage  races — a  life  of  fierce  extremes.  One 
day  he  is  in  the  hottest  and  busiest  of  all 
market-places — the  stock-market-place — agitated  by 
all  the  hopes  and  fears,  and  torn  by  all  the  emotions 
and  passions,  engendered  by  the  thirst  for  speedy 
riches ;  the  next  day  the  struggle  is  over,  and  he  is 
plunged,  at  once,  into  the  opposite  extreme  of  still- 
ness and  repose.  This  stillness  and  repose  is  bred 
sometimes  of  utter  and  irretrievable  ruin,  it  is  then 
the  calmness  of  despair ;  sometimes  it  is  derived  from 
that  serene  sense  of  satisfaction,  which  the  successful 
speculator  feels  when  he  has  made  a  hit.  This  feel- 
ing is  a  negative  one.  He  has  not  lost  his  money,  he 
has  not  failed  in  his  pursuit  of  money.  The  fact 


UNSATISFIED    CRAVINGS.  239 

that  he  has  great  riches  won  against  so  much  odds, 
gives  him  little  pleasure.  He  undervalues  it.  It 
seems  of  little  account,  until  he  thinks  what  it  will 
procure.  It  will  buy  such  pleasures  as  money  can 
buy — material  pleasures. 

The  Wall  Street  operator  is  a  materialist  logically, 
and  in  the  strictest  consistence  with  his  earnest  pur- 
suits. After  his  toils  and  anxieties  he  craves  enjoy- 
ments. He  would  repay  with  prodigality  these  toils 
and  anxieties  to  which  he  has  been  subjected  in  the 
pursuit  of  his  gains.  The  captors  of  a  fortress  which 
has  been  obstinately  defended,  sometimes  put  the 
garrison  to  the  sword.  The  hunter  joyfully  spears 
the  wild  animal  which  has  led  him  a  long  chase.  The 
successful  Wall  Street  man  takes  his  revenge  on  the 
money  which  has  cost  him  dearly — he  spends  it  on 
himself  and  his  friends — he  pours  it  out  as  though  it 
were  common  and  cheap  as  the  water  he  drinks  or 
the  air  he  breathes. 

He  proposes  to  himself  a  terrestrial  paradise,  not 
like  that  of  the  Mahometan,  however,  who  proscribes 
wine.  He  would  "  suck  the  subtle  blood  of  the  grape 
till  the  high  fever  seethe  his  blood  to  froth."  Reti- 
nues of  lackeys,  studs  of  horses,  banquetings,  gar- 
lands, singing  men  and  singing  women,  spectacles  in 
the  theatre  shall  be  his,  amid  which,  he  shall  walk 
as  a  literal  cloud-compeller,  while  the  partaga  or  the 
miraculously  carved  roseate  foam- tinted  meerschaum 
distills  its  fragrance  under  the  quiet  pressure  of  his 
lips. 

The  paths  in  this  paradise  are  all  circuitous;  one 
eternal  round  of  enjoyments  which  become  at  last 
tasteless.  Then  comes  restlessness,  a  craving  for 


240  INSIDE    LIFE   IN   WALL    STREET. 

change  of  scene.  He  becomes  first  a  perambulator, 
then  a  pedestrian,  then  a  tourist — the  nomad  of  the 
watering  places. 

E was  a  "red  check  man,"  in  other  words  he 

had  made  $100,000  in  stocks. 

Two  men  of  about  the  same  age,  temperament  and 
tastes  may  see  each  other  every  day  for  twenty-five 
years,  and  yet  they  may  never  come  together ;  though 
their  paths  be  ever  so  near,  they  are  in  parallel  lines, 
which  never  meet.  Now  magnetize  them  by  giving 
them  a  hundred  thousand  dollars  apiece,  and  they 
fly  together  like  the  iron  and  the  lodestone.  This 
means  conviviality,  fraternity,  sympathy. 

E and  I  were  Damon  and  Pythias,  over  again, 

like  Juno's  swans,  we  went  always  "  coupled  and  in- 
separable." We  had  made  our  money  in  the  same 
stocks  and  now  we  spent  it  in  company — a  partner- 
ship in  the  business  of  pleasure-seeking.  We  dined 
together,  rode  together,  slept  together.  When  we 
quarreled  with  each  other  we  had  never  "let  the  sun 
in  Capricorn  go  down  on  our  anger." 

We  were  both  engaged  in  pondering  the  same  im- 
portant question:  what  shall  we  do  with  it?  the 
$100,000.  The  answer  to  the  question  was  partly 
contained  in  what  we  had  just  been  doing,  viz.,  dining 
at  Delmonico's — innocent,  but  expensive  amusement. 
We  were  spending  it  as  fast  as  horses,  banquets,  and 
the  etceteras  would  permit. 

One  thing,  however,  had  been  resolved  upon,  we 
would  never,  no,  never,  any  more  speculate  in  Wall 
Street,  at  least  by  buying  and  selling  upon  a  margin, 
except,  (ah!  that  unfortunate  word)  except  in  Gov- 
ernment Bonds,  of  which  we  severally  held  $175,000 


SOMETHING   STILL   WANTING.  241 

worth  bought  on  a  margin  of  $8,000,  and  paid  for 
by  loans  obtained  from  Savings  Banks. 

Two  men  in  their  golden  prime,  both  worthy  to 
receive  a  first-class  diploma  from  a  Life  Insurance 
Company,  with  $100,000  at  their  bankers,  sitting 
before  an  open  window,  at  Delmonico's,  in  the  twi- 
light of  a  glorious  July  evening,  after  a  sumptuous 
dinner,  would,  in  the  popular  use  of  the  term,  be 
called  happy.  We  tried  to  believe  ourselves  so.  But 
there  was  something  wanting.  Somehow,  that  day, 
the  soup  a  la  reine  was  a  trifle  worse  flavored  than 
it  was  a  month  before.  The  filet  of  sole  was  not 
done  to  the  proper  turn,  the  game-bird  was  a  tk  little 
too  high."  The  Roederer  champagne  was  flat,  and 
suggested  sugar  of  lead,  to  the  already  squeamish 
palate. 

Restlessness  again!  Where  can  we  go  ?  not  to  ride, 
for  our  horses  have  the  ring-bone,  or  quarter-crack, 
or  some  one  of  the  other  ills  that  horse-flesh  is 
heir  to.  Ah!  a  happy  thought — a  watering-place. 

"Garden." 

The  waiter  stood  by  us,  looking  fractional  currency 
out  of  his  eyes.  "  Bring  us  a  Herald."  "  Oui,  oui ! " 
The  newspaper  was  handed  to  us,  and  carefully 
conned,  in  search  of  new  places  of  summer  resort. 
We  found  nothing  new  that  was  tempting,  so  we 
made  a  trip  to  Long  Branch ;  two  days  was  enough 
for  us  there.  Sachem's  Head,  then;  after  this,  the 
Pequot  House,  from  which  we  hurried  to  Newport. 

One  of  these  watering-places  was  a  type  of  all 
the  others.  Of  course,  the  beauty  and  fashion  was 
there!  it  always  is.  There  were  the  Smitthes,  and 
the  Taylourres,  the  De  Bylkes,  the  Van  Ohnehosens. 


242  INSIDE    LIFE  IN   WALL   STREET. 

and  other  lights  of  the  gay  world.  Scandal  and 
flirtation  hunted  in  couples.  Argus-eyed  dowagers 
watched  Hesperidean  damsels,  and  at  the  same  time 
tore  reputations  to  tatters.  Damsels  made  dangerous 
play  of  eyes,  fans  and  handkerchiefs.  Fat  babies 
stared  very  hard  at  the  ocean.  Stout,  single  old 
gentlemen  sported  like  dolphins  in  the  surf,  or  rolled 
ten-pins,  and  imagined  they  were  young  again.  Of 
course,  everybody  was  bound  to  consider  himself 
happy,  or  act  as  if  he  did. 

But  Wall  Street  cropped  out  everywhere.  The 
husbands  of  the  matrons,  the  fathers  of  the  damsels, 
the  brothers  of  the  dowagers  and  the  single  old  gen- 
tlemen, all  appeared  to  have  made  money  in  stocks, 
or  if  they  had  lost  it  no  one  heard  anything  about  it 
there.  The  operators  and  brokers  were  on  hand  in 
force.  It  was  stocks  on  the  piazzas,  stocks  in  the 
parlor,  stocks  at  breakfast,  dinner,  tea.  The  bevy  of 
dames  in  the  drawing-rooms  would  listen  with  breath- 
less interest  to  tales  of  hair-breadth  escapes  in  the 
Harlem  fight,  or  fortunes  won  "  in  the  imminent 
deadly  breach  "  in  Pacific  Mail  or  Hudson,  all  which 
tales  were  broken  in  upon  after  the  usual  style  by 
such  hen-words  as  "Oh,  that's  so  nice,"  "perfectly 
splendid,"  "heavenly,"  etc.,  "to  make  a  hundred 
thousand  in  a  month,  just  think  of  it!"  "Well  I 
never,"  "no,  I  never  did  see,"  etc.,  etc.,  etc. 

After  this  we  went  to  Saratoga.  If  there  is  any 
one  place  for  which  the  Wall  Street  man  has  a  pre- 
dilection in  his  days  of  relaxation,  that  place  is  Sara- 
toga. King  Cornelius  holds  his  court  there.  The 
other  monarchs  of  the  stock-market  make  royal  pro- 
gresses thither.  Their  lieutenants  go  there.  The 


SARATOGA  AND   WALL   STREET.  243 

rank  and  file  go  there.  The  gay  Spa,  to  borrow  a 
phrase  from  Artemus,  is  a  "sweet  boon"  to  the 
whole  tribe  of  stock-jobbers  and  operators,  as  a  head- 
clearer,  blood-cooler  and  general  renovator  of  a  bil- 
iary system  too  often  disordered  by  deep  potations 
of  the  Delmonico  brand— "the  foaming  grape  of 
eastern  France,"  or  of  that  tutelar  alcoholic  genius 
of  bibulous  Columbia — corn  juice. 

Of  course,  E and  I  made  the  rounds  at  Sara- 
toga after  the  usual  fashion,  drinking  bilge-water  in 
the  morning,  driving  to  the  lake  and  eating  the  cele- 
brated potatoes  prepared  there  with  the  deftest  mani- 
pulation of  culinary  fingers.  Then  we  plied  the 
cranks  of  the  hand-cars  on  the  circular  railway,  always 
selecting  the  stoutest  young  ladies  for  our  companions 
with  a  sharp  eye  to  the  development  of  biceps,  pectoral 
and  deltoid  muscles.  The  stout  young  ladies  sat  up 
very  straight  in  the  hand-cars,  and  smiled  very  sweetly 

upon  E- and  me,  while  we  toiled  at  the  winch, 

and  made  the  vehicle  spin  round  the  iron  groove.  We 
also  didn't  forget  the  bowling-alley,  or  the  pistol 
gallery,  or  the  Indian  encampment.  We  made  ten- 
strikes,  and  blazed  away  at  the  bull's-eye,  and  after 
we  had  made  the  rounds  we  came  back  and  smoked 
very  large  and  full-flavored  regalias. 

At  other  watering  places,  they  talked  stocks;  at 
Saratoga  they  bought  and  sold  them.  Little  knots 
of  dealers  stood  in  the  piazzas  of  the  United  States 
Hotel,  the  Union  and  the  Congress,  and  traded  in  Erie 
and  Harlem.  The  great  pulsations  of  the  heart-finan- 
cial, one  hundred  and  eighty  miles  away,  throbbed 
here  through  the  telegraphic  wires. 

Another  great  rise  in  stocks  began  to  be  predicted. 


244  INSIDE    LIFE   IN   WALL    STREET. 

Speculation  is  a  contagious  disease.  In  Saratoga  it 
is  generally  more  or  less  an  epidemic. 

E and  I  found  ourselves  discussing  the  point 

whether  we  might  not  reconsider  our  resolution  and 
make  just  one  more  operation  on  a  margin.  Every- 
thing looked  bright.  It  could  do  us  no  harm  to  buy 
a  thousand  shares  or  so  of  some  good  dividend  pay- 
ing stock. 

Even  deliberation  is  dangerous  upon  such  points. 
The  woman  who  hesitates  is  lost.  The  retired  Wall 
Street  man,  who  asks  himself  whether  he  may  not 
buy  stocks  on  a  margin,  just  once  more,  is  as  good  as 
committed  again  to  his  old  vice — speculation. 

One  evening,  early  in  August,  just  as  the  male 
animals  were  about  to  prance  in  the  parlors  of  Union, 

at  the  bidding  of  the  queens  of  society,  E and  I 

retired  to  a  seat  in  the  rear-grounds,  for  a  quiet 
smoke,  when  looking  towards  the  back  piazza,  we 
saw  emerge  from  one  of  the  parlor  doors,  somebody 
we  had  seen  before.  It  was  a  tall  man,  all  shaven 
and  shorn,  in  a  spotless  evening  costume,  brisk  and 
debonair,  who  seemed  as  if  he  were  looking  for  some 
"party,"  he  didn't  know  exactly  whom. 

We  recognized  him  quickly,  as  L the  operator, 

who  had  given  me  telegraphic  news  of  the  retreat  of 
Hooker,  the  week  before  the  Chancellorsville  rise, 
and  who  had  just  arrived  by  the  evening  train. 

L belonged  to  the  unnoted  branch  of  the 

Q family,  which  had  established  a  kind  of  title 

by  adverse  possession  to  certain  government  offices, 
which  they  had  held  from  Washington's  administra- 
tion, down  to  Lincoln's.  At  present,  he  had  a  brother 
in  the  treasury  department,  an  uncle  in  the  war 


THE    FULL    TIDE    OF    PROSPERITY.  245 

office,  a  cousin  was  a  brigadier-general,  and  his 
brotht  r's  wife's  father  was  mixed  up  with  telegraph 

companies.  Hence,  it  was  that  L had  organized 

a  system  of  early  telegraphic  information,  and  had 
thereby,  got  admitted  into  some  of  the  "rings"  in 
the  street.  In  this  way  he  had  made  $300,000,  and 
having  sweltered  in  the  stock-market  all  summer, 
now  that  he  was  in  Saratoga,  he  was  naturally  in 
fine  spirits. 

He  saw  us,  moulded  his  hands  into  the  telescopic 
shape  and  took  a  squint  at  us.  Then  advanced  to- 
wards us,  pointing  with  his  dexter  forefinger  as  if  to 
some  planet  then  faintly  twinkling  in  the  zenith,  put 
his  left  hand  to  one  side  of  his  mouth  and  whispered 
something  as  though  he  expected  it  to  be  conveyed 
to  us  by  some  unseen  medium ;  all  of  which  panto- 
mime we  interpreted  to  mean  that  he  had  sold  his 
stocks  at  a  high  figure. 

First,  salutations,  then  "how  are  stocks,  L ?" 

Stocks  were  firm  with  an  upward  tendency.  He  had 
sold  everything  he  had,  except  Erie.  That  he  was 
going  to  hold  for  125.  The  pool  in  Hudson  had 
carried  the  price  to  180.  He  did  not  think  they 
would  be  able  to  unload.  He  had  sold  his  Hudson  at 
175,  etc.,  etc.  Did  he  know  of  anything  good  to 
buy?  Yes.  Erie  was  good.  Daniel  Drew  had  been 
going  short  of  it,  but  he  would  lose  money  by  it. 
There's  another  stock  that's  going  up,  sure.  Old 
Southern ;  A.  G.  Jerome  had  taken  hold  of  it,  it  was 
good  for  120.  Lots  of  shorts.  Had  left  word  with 
his  broker  to  buy  a  thousand  shares  any  where  under 

94.  Thus  L talked.  He  further  added  that  he 

was  going  to  stay  at  the  Springs  the  rest  of  the 


246  INSIDE    LIFE   IX   WALL    STREET. 

month,  and  thought  he  could  make  more  money 
by  keeping  away  from  the  market  and  operating  by 
telegraph. 

That  night  E and  I  each  telegraphed  to  our 

brokers  thus;  "Buy  500  Old  Southern  and  500 
Erie  at  the  market  price.  Have  mailed  $10,000, 
margin." 

The  following  afternoon  came  the  answer.  "  Have 
bought  500  Old  Southern,  92;  500  Erie,  103."  We 
had  broken  our  resolution  to  buy  no  more  stocks. 
We  had  once  more  embarked  on  the  stormy  sea,  out 
of  our  haven  of  rest. 

After  this,  our  walks  lay  between  Union  Hall  and 
the  telegraph  office,  where  we  received  the  stock 
quotations  two  or  three  times  daily,  from  our  respec- 
tive brokers  in  Wall  Street.  The  telegraph  com- 
menced to  prick  off  as  the  price  of  old  Southern,  92 ; 
next  day  88;  then  96.  Again  the  message  was  sent 
down :  "  Buy  1000  Old  Southern,  market  price."  Be- 
fore that  lot  was  bought,  the  price  had  risen  to  104. 
Then  whish!  it  went  to  111.  Old  Southern  was  do- 
ing well.  Erie  rose  more  gradually.  Heavy  bodies 
move  slowly.  When  Old  Southern  darted  to  111,  a 
rise  of  19  per  cent.,  Erie  stood  at  110.  "  Buy  1,000 
more  Erie,"  said  greed.  "Don't,"  whispered  caution. 
Greed  was  stronger  than  caution.  I  telegraphed 
"Buy  1,000  Erie,  market  price."  That  lot  cost  114. 
The  regret  that  I  had  not  bought  sooner  and  before 
the  price  was  lower,  began  to  work  in  the  mind. 
Its  fruit  was  anger,  rashness.  I  bought  1,000  more 
Erie  at  115i.  Then  I  sat  down  and  figured  up  first 
what  my  profits  would  be  on  the  supposition  that  I 
sold  at  the  ruling  prices,  viz.,  Erie,  120,  and  Old 


TO  SELL  OR  NOT  TO  SELL?         247 

Southern  at  108 1;  for  Erie  had  risen,  and  Old  South- 
ern  had  fallen  meanwhile. 

Thirty-one  thousand,  six  hundred  and  twenty-five 
dollars !  Now,  I  had  put  my  selling  price  at  125  for 
Erie,  and  120  for  Old  Southern.  If  the  2,500  Erie, 
and  the  1,500  Old  Southern  were  disposed  of  at  those 
prices,  the  profits  would  foot  up  fifty-nine  thousand 
eight  hundred  and  seventy-two  dollars!  I  decided 
to  hold  for  the  higher  price.  Greed  of  gain  like  the 
horse-leeches  daughters,  which  cry  give,  give !  Was 
I  grasping  at  the  shadow,  while  I  let  the  substance 
fade  ?  Was  I  to  furnish  another  example  to  point 
the  moral  of  the  fable  of  the  dog,  who  dropped  the 
bone  to  catch  at  the  image  reflected  in  the  water? 
Time  will  show.  Of  this  one  thing  be  assured,  reader, 
the  Wall  Street  man  lives  in  the  midst  of  shadows. 

Phantasies  of  what  might  be,  memories  of  what 
has  been,  regrets  for  what  might  have  been.  His 
mind  feeds  upon  these  figments  of  the  brain.  They 
become  to  him  the  same  as  a  living  active  reality, 
which  soothes  and  pains  alternately. 

"For  like  the  bat  of  Indian  brakes, 
Its  pinions  fan  the  wound  it  makes, 
And  soothing  thus  the  victim's  pains, 
It  drinks  the  life-blood  from  his  veins." 


CHAPTER  XV. 

WHAT  BECAME  OF  IT.      HENRY  KEEP  AND  OLD 
SOUTHERN. 

Our  Financial  Oracle  gives  us  General  Views  on  Stocks — News  of 
Panic  in  the   Woods — The  Nightmare   Ride  in  Sleeping-Cars — I 

Learn  my  Fate— The  History  of  the  Mystery— The  P Pool  in 

Erie— Cornering  Uncle  Daniel  with  $300,000— A.  G.  Jerome  Playing 
with  Old  Southern,  and  Working  the  Bears— The  Final  Grip— A 
Gray-eyed  Man  Reading  a  Telegram  at  Saratoga,  "  Come  on  to 
New  York  Without  Delay,  the  Fruit  is  Ripe  "—Henry  Keep,  His 
Antecedents,  Character  and  Operations — A  Pauper's  Son  Dies 
Worth  $4,000,000— The  Plot— Money  Tightens,  and  the  Trap  is 
Sprung — Jerome  Laid  Out  Cold — A  Meditated  Scolding  Terminates 
in  a  Dinner  at  Delmonico's — What  Came  of  the  Dinner — A  Flyer  in 
Harlem — The  Last  Resort — Almost  Cleaned  Out — An  Operation  in 
Seven-thirties— I  Play  my  Last  Card ;  Is  it  a  Trump? 

—  was  the  oracle  of  our  particular  coterie 


at  Saratoga.  All  knotty  questions,  having 
reference  to  finance  and  the  mysteries  of 
stocks,  were  referred  to  him,  and  his  answers  were 
received  without  demurrer.  Any  one  who  had 
snatched  $300,000  out  of  the  ravenous  jaws  of  Hud- 
son and  Harlem,  deserved  to  be  called  an  oracle. 
Moreover,  this  oracle  was  somewhat  given  to  volun- 
tary expositions  of  the  all-absorbing  topic. 

L had  "views"  of  stocks  and  speculation  in 

general.     "  Nothing  can  be  easier  than  to  make  money 
in  Wall  Street,"  said  he. 

This,  spoken  in  the  tone  of  one  having  authority, 
caught  our  attentive  ear. 


HOW  TO  MAKE  MONEY  IN  STOCKS.      249 

"First,  buy  your  stocks  low.  Low  is  of  course  a 
relative  terra,  but  any  man  who  can  tell  B  from  a 
bull's  foot  can  decide  when  stocks  are  low." 

"Aye,  aye,"  say  we. 

"  Second,  put  up  a  large  margin ;  by  the  term  large 
I  mean  at  least  twenty  per  cent." 

"Very  well,  what  next?" 

"  Third,  get  out  of  the  "  street,"  leave  the  city,  go 
away  from  hotels,  railroads,  telegraphs,  out  of  the 
ken  of  brokers,  into  the  woods,  where  the  word  stocks 
is  never  sounded." 

"  But  why  go  away  after  you  have  bought  stocks?  " 

"Because  a  man  is  befooled,  bewitched  and  be- 
deviled by  what  he  hears  in  the  market.  He  is  sure 
to  sell  out  just  when  he  ought  to  hold  on,  or  do  some 
other  foolish  thing." 

"  Now,"  continued  he,  "  I'm  off  to  the  woods  for  a 
couple  of  weeks  or  so,  and  if  you'll  go  along  you'll 
make  more  money  than  you  will  here,  listening  to 
that  buzzing  telegraph." 

That  afternoon  we  bought  rifles,  fishing  tackle,  etc., 
etc.,  and  in  sixty  hours  were  lying  under  a  big  hem- 
lock, forty  miles  from  a  railroad  or  telegraph,  smoking 
and  laying  out  for  a  murderous  campaign  against  the 
trout. 

Two  weeks  sped  away  before  we  saw  a  daily  paper 
—the  New  York  Tribune.  We  laid  it  out  on  the 
^rass  and  three  heads  bumped  agains  each  other, 
while  three  pair  of  eyes  riveted  on  the  financial  col- 
umn, saw  the  following  announcement,  viz. : 

"  Thursday,  September  4th.  The  panic  which  com- 
menced in  stocks  yesterday,  has  been  of  greater  mag- 
nitude and  of  a  more  excited  character  to-day ! "  etc. 


250  INSIDE    LIFE   IN   WALL   STREET. 

"Old  Southern,  88!" 

"Erie,  104i!" 

"I'm  out  $80,000,"  said 

"I'm  out  $40,000,"  said 

"And  I  $40,000,"- 

That  ride,  forty  miles  in  a  country  wagon  over  a 
rough  road,  was  a  little  the  slowest  and  longest  ever 
taken  by  Wall  Street  men.  When  we  struck  the 
railroad  we  made  a  general  rush  for  the  telegraph 
office.  L  wrote  three  separate  telegrams  to  our 
three  several  brokers,  "  Don't  sell  our  stocks.  Have 
sent  more  margin."  Then  three  separate  checks  were 

drawn  and  mailed.  L 's  check  was  for  sixty 

thousand  dollars ;  E — — 's  and  mine  for  thirty  thou- 
sand, each.  We  reached  Troy  in  time  to  take  the 
ten  o'clock  night  train. 

"  Sleeping  cars ! "  "  Ha !  ha ! "  said  E , "  a  queer 

idea  that.  They  are  called  sleeping  cars,  I  suppose, 
because  people  never  sleep  in  them."  We  certainly 
never  slept  a  wink  of  genuine  sleep  that  night.  True, 
now  and  then,  we  sunk  into  a  kind  of  doze,  crowded 
with  dreams— nightmares,  in  which  we  seemed  to 
be  falling  from  vast  heights,  amid  screamings  and 
the  roaring  of  many  waters.  Men  with  lanterns 
came  and  shook  us,  when  the  train  stopped,  and  said 
we  were  making  too  much  noise,  moaning  and  mut- 
tering, and  disturbing  the  other  passengers. 

When  the  train  started,  we  commenced  falling 
again  down  the  heights,  amid  the  same  unearthly 
noises,  and  the  roar  of  the  wheels  sufficed  again  to 
drown  Our  gurgling  cries.  Three  pallid,  hollow-  eyed 
men,  we  rose  betimes,  as  the  cars  thundered  past 
Manhattanville,  and  watched  for  the  first  newspaper 


THREE  DAYS  TOO  LATE.          251 

boy.  It  was  in  the  gray  of  the  dawn,  that  we  read 
the  gratifying  announcement,  that  "there  was  an 
active  speculative  demand  for  stocks,  etc." 

Old  Southern  closed  at  95. 

Erie  stood  at  107. 

We  were  saved!  When  we  reached  the  station, 
we  got  into  a  hack,  and  drove  down  town.  .Break- 
fast at  lower  Delmonico's.  While  discussing  our 
dejeuner  a  la  fourchette,  of  which  we  stood  greatly  in 
need,  after  our  nightmare  journey,  a  dapper  little  man, 
with  eyes  that  resembled  black  glass  beads,  fixed 
firmly  in  his  head,  entered  the  lower  room  where  we 
were  sitting,  and  proceeded  to  imbibe  something 
which  had  a  greenish  hue,  suspiciously  reminding  us 
of  that  demoniac  drink  absinthe,  with  which  it  seems 
he  was  in  the  habit  of  refreshing  himself  before  his 
daily  toil.  This  dapper  little  man  did  the  outside 
buying  and  selling  for  my  broker.  He  saluted  us 
with  a  sedate  smile,  judiciously  tinged  with  sugges- 
tions of  panic,  and  a  deprecating  look  withal,  which 
augured  ill  as  it  appeared  to  my  apprehensive  sense. 

"  Did  you  get  my  telegram,  and  the  margin  I  sent 
you?" 

"  Oh,  yes.     But  too  late." 

"  Too  late !     What  do  you  mean  ?  " 

"  Why,  too  late  to  apply  on  your  stocks.  We  had 
to  sell  them." 

"You  had  to  sell  them?" 

"Yes.  You  see  the  market  was  panicky.  There 
was  only  one  per  cent,  of  your  margin  left.  You 
were  away;  we  had  to  look  out  for  ourselves.  If 
you'll  go  to  our  office  you  can  find  out  all  about  it. 
I'm  in  a  hurry,  the  market  is  brisk  to-day.  Bye,  bye." 


252  INSIDE   LIFE   IN   WALL   STREET. 

On  going  to  my  broker's  office,  the  account  of  my 
stock  transactions  for  the  past  month  was  duly  ren- 
dered. 

The  Erie  had  been  sold  at  100. 

The  Old  Southern,  at  82. 

I  had  lost  $60,000,  my  original  margin,  and  found 
myself  indebted  to  my  broker  in  the  sum  of  $1,000 
and  more !  This  is  the  custom  of  Wall  Street.  When 
an  operator's  margin  runs  low  he  is  promptly  sold 
out,  if  on  notice  he  fails  to  furnish  more  margin. 

At  the  time  these  sales  were  made,  I  had  $40,000 
in  the  bank  to  iny  credit.  The  thirty  thousand  dol- 
lar check,  fresh  margin,  which  I  had  forwarded  after 
coming  out  of  the  woods,  reached  my  broker  three 
or  four  days  after  the  stock  had  been  sold.  Of  course 
I  could  not  complain,  it  was  my  misfortune. 

How  happened  it  that  it  should  come  up  to  blow 
so  quickly  out  of  a  sky,  which  looked  as  though  it 
promised  every  one  a  long  season  of  bright  sunshine  ? 

Hardly  any  two  stocks  could  have  been  selected, 
which  would  have  inflicted  more  serious  damage  up- 
on a  buyer  than  Erie  and  Old  Southern.  Erie  and 
Old  Southern  had  both  been  in  the  hands  of  cliques. 
The  movement  in  the  former  stock  commenced  late 

in  July.  The  leader  in  this  movement  was  P ,  a 

young  operator  who  had,  or  controlled  about  $300,000. 
He  is  said  to  have  been  a  Californian,  and  now  came 
down  like  a  lusty  bullock  from  the  Sierra,  prepared  to 
attack  the  king  of  all  the  Bears  in  his  fortress.  He 
and  his  coadjutors  proposed  to  themselves  the  Her- 
culean feat  of  cornering  Daniel  Drew !  Corner  Uncle 
Daniel  with  $300,000  !  "  Canst  thou  draw  out  levi- 
athan with  a  hook  ?  Canst  thou  put  a  hook  into 


CORNERING   DANIEL    DREW.  253 

his  nose,  or  bore  his  jaw  through  with  a  thorn?" 
Quixotic  as  the  enterprise  appeared,  it  is  said  to  have 
been  very  nearly  successful. 

Drew  commenced  selling  Erie  for  future  delivery, 
when  it  was  in  the  neighborhood  of  100.  The  stock 
amounted  then  to  about  $11,000,000.  At  least  half 
this  amount  was  on  the  street.  The  rest  was  held 
abroad,  or  in  the  hands  of  permanent  investors  at 
home,  outside  of  Wall  Street.  As  the  price  rose,  Drew 
kept  selling,  and  the  clique  kept  buying.  Every- 
thing seemed  to  assist  them.  Erie  was  earning  divi- 
dends. The  money  market  was  easy  at  five  per  cent. 
Large  blocks  of  the  stock  were  taken  by  various  out- 
side bull  operators,  who  vowed  to  hold  it  for  150. 
The  borrowing  demand  created  by  the  heavy  short 
sales  of  Drew  and  his  brother  bears,  helped  to  keep 
the  price  firm  at  120.  The  stock  rose  to  123,  and 
now  the  -bulls  were  rampant.  Bets  were  offered  that 
Drew  would  have  to  settle  within  a  week.  Such  was 
the  situation  of  Erie  during  the  latter  part  of  August, 
1863.  The  party  which  had  the  control  of  Old  South- 
ern then,  was  a  much  stronger  one. 

A.  G.  Jerome,  the  Napoleon  of  the  Public  Board 
in  1863,  was  then  in  the  height  of  his  power.  A  long 
series  of  dashing  operations  on  the  bull  side  had 
brought  him  a  million  or  two  in  money  on  his  own 
account,  but  what  was  more,  had  raised  his  prestige 
to  such  a  point  that  he  could  command  an  almost  un- 
limited credit,  while  a  crowd  of  depositors  brought 
money  to  his  banking-house,  bidding  him  use  as  he 
thought  best.  A  dangerous  point  for  a  financier  to 
reach,  especially  if  he  accepts  the  trusts  thus  forced 
upon  him.  His  position  in  August  seemed  \rapregna< 

16 


254  INSIDE    LIFE    IN   WALL    STREET. 

ble.  The  stocks  in  which  he  was  most  deeply  in- 
terested showed  him  an  enormous  profit.  One  of 
these  stocks  was  Harlem,  so  famed  in  financial  story. 
Its  wonderful  vibrations  for  three  months  were  due 
largely  to  him. 

But  Old  Southern  was  his  pet. 

He  commenced  paying  it  attention  early  in  July. 
He  played  with  it,  fondled  it,  tossed  its  bulk  up  and 
down,  tantalizing  the  bears  and  bulls  alternately.  All 
the  while  he  was  apparently  playing  in  this  way,  se- 
rious business  was  going  on.  He  was  weeding  out 
the  weak  holders  when  he  dropped  the  price,  and 
quietly  taking  every  short  contract.  Then  he  gripped 
it  fast  and  pushed  it  steadily  up,  dropping  it  now  and 
then,  however,  to  encourage  the  short-sellers. 

Torrid  August  came,  but  brought  no  rest  or  vaca- 
tion for  those  who  held  Old  Southern.  Jerome  had 
promised  his  customers  and  the  street  that  he  would 
make  Old  Southern  a  second  Harlem.  His  grip  tight- 
ened. On  the  14th  Old  Southern  jumped  16  per  cent., 
from  92  to  108.  The  next  day  it  rose  to  113,  but  fell 
suddenly  back  to  108.  Some  undaunted  bear  was  sell- 
ing it.  It  was  dropped  from  113  to  107,.  in  order  to 
take  these  sales.  The  stock  came  on  the  market  by 
the  ten  thousand  shares.  The  greater  part  of  these 
sales  were  made  in  the  public  board.  The  market  was 
staggered,  but  only  for  a  moment.  Jerome,  armed 
with  a  twenty  per  cent,  profit,  which  the  price  of  the 
stock  then  showed  him,  stepped  into  the  breach,  and 
held  up  the  market  price  on  his  Atlantean  shoulders. 
The  stock  at  last  was  no  longer  offered,  except  in  hun- 
dred share  lots.  Now  he  had  the  bears  in  his  power. 

We  shall  see. 


HENRY    KEEP    RECEIVING   A    TELEGRAM.          25o 

Who  was  the  undaunted  bear  who  sold  thirty  thous- 
and shares  of  Old  Southern  in  August,  1863,  and  so 
would  place  his  head  between  the  upper  and  lower 
jaw  of  the  lion  of  the  Public  Board? 

Three  weeks  before  the  panic,  by  which  we  suffered 
as  already  described,  and  while  we  were  still  at  Sara- 
toga, feasting  our  imaginations  with  the  prospect  of 
the  profits  which  we  were  going  to  finger  when  Old 
Southern  should  touch  120,  something  occurred,  which, 
could  we  have  guessed  its  full  significance,  wrould 
have  made  us  fly  to  New  York  instead  of  going  to 
the  woods. 

A  middle-aged,  thick-set  man,  with  a  round,  smooth 
face,  and  a  deep  gray  eye,  stood  on  the  piazza  of 
Congress  Hall,  reading  a  telegram,  the  very  morning 
we  started  on  our  sylvan  excursion.  We  saw  him 
fold  it  up  and  consign  it  to  his  pocket,  just  as  we  en- 
tered the  'bus  which  was  to  take  us  to  the  cars. 

That  telegram  of  a  dozen  words  cost  us  an  aggre- 
gate loss  of  $79,000.  The  middle-aged,  thick-set 
man  was  Henry  Keep.  This  noted  operator  and 
money  king,  was  about  to  do  several  things,  when  he 
stood  on  the  piazza  of  Congress  Hall  that  morning. 
He  was  about  to  break  the  Old  Southern  corner,  and 
ruin  Jerome.  He  was  about  to  make  a  million  dol- 
lars for  himself,  and  in  doing  this,  he  was  about  to 

take  away  from  L ,  E and  myself,  the  sum 

of  $79.000,  as  already  stated. 

For  the  past  twelve  years,  Henry  Keep  had  slowly, 
but  surely  been  advancing  his  fortunes  in  the  stock- 
market.  Like  most  other  very  wealthy  and  success- 
ful Wall  Street  men,  he  commenced  without  a  penny, 
and  although  he  died  when  hardly  past  the  meridian  of 


256  INSIDE    LIFE  IN   WALL    STREET. 

life ;  he  was  then  worth  $4,000,000 !  He  used  to  boast 
that  he  graduated  at  the  poor-house,  where  he  fin- 
ished his  academical  education,  and  this  was  literally 
true,  for  it  is  said  his  father  was  a  town-pauper  some- 
where in  the  interior  of  the  State  of  New  York.  He 
learned  lessons  in  that  iron  school  of  poverty,  which 
stood  him  in  good  stead.  An  open  countenance,  but 
thoughts  concealed,  a  still  tongue,  but  a  busy  brain 
and  quick  hand.  He  once  told  a  gentleman,  after 
his  fortune  was  counted  by  the  million,  that  the  idea 
of  money  haunted  him  day  and  night,  during  all  his 
boyhood.  It  stood  before  him  as  a  visible  presence, 
during  his  maturer  years.  His  first  operations  were 
in  money.  He  bought  paper  money  at  a  discount, 
made  a  few  thousand  dollars  by  these  operations,  and 
then,  about  twenty  years  ago,  came  to  the  money  seat 
— Wall  Street. 

Here  he  soon  linked  his  fortunes  with  the  stock 
market.  Old  Southern  Railroad  Company  became 
his  favorite  stock.  No  clause  in  its  charter,  no  rail- 
road law  having  relation  to  it,  no  by-law  of  the  Com- 
pany, that  he  did  not  know  by  heart.  In  1862,  and 
in  the  early  part  of  1863,  he  had  made  large  sums  by 
buying  it.  I  remember,  in  the  spring  of  1863,  see- 
ing him  stand  behind  his  broker  in  the  street-crowd 
and  pull  his  coat-tail,  as  a  signal  to  buy.  His  broker 
after  buying  one  thousand  shares  of  Old  Southern 
stopped,  when  he  felt  his  coat-tail  jerked  again,  vio- 
lently, and  he  commenced  buying  until  after  seven 
successive  jerks  he  had  bought  eight  thousand  shares, 
all  for  the  account  of  the  quiet  man  in  the  rear,  who 
thereupon  relaxed  his  grasp,  and  retired  to  his  office 
without  saying  a  word.  He  believed  in  the  proverb, 


HOW  A  FORTUNATE  OPERATOR  SPENDS  HIS  MONEY. 


KEEP'S  POKTRAIT.  259 

"Speech  is  silver;  silence  is  golden."  His  reticence 
about  everything  relating  to  stocks  was  one  of  the 
strong  points  in  his  character  as  a  financier,  for  cer- 
tainly if  there  is  one  thing  needful  in  stock  opera- 
tions, it  is  reticence,  first,  last  and  always. 

This  trait  became,  in  his  later  years,  somewhat  less 
marked  at  least  in  matters  relating  to  himself.  I  recol- 
lect seeing  him  show  to  a  prominent  broker,  whom  he 
met  in  the  office  of  Lockwood  &  Co.,  a  certificate  for 
ten  thousand  shares  of  North  Western  stock,  then 
selling  for  60,  which  he  held  as  an  investment,  and 
remarking  that  he  should  never  sell  that  stock  till 
it  brought  him  one  million  dollars.  A  few  months 
after,  the  price  rose  to  par,  and  he  could  then  have 
realized  his  profit.  Whether  he  did  so,  I  cannot  say. 

In  1863,  Henry  Keep  was  a  director  of  the  Michi- 
gan Southern  and  Northern  Indiana  Railroad  Com- 
pany, commonly  nicknamed  Old  Southern. 

The  telegram  before  mentioned,  was  from  another 
high  official  of  the  company,  informing  him  that  the 
stock  was  selling  for  107,  and  requesting  him  to  come 
to  New  York  without  delay ! 

Why  was  this  message  sent  to  him  ? 

The  next  morning,  he  was  seen  in  the  office  of  the 
company.  He  was  generally  a  bull ;  now  he  was  pre- 
paring to  play  the  part  of  a  bear. 

"The  best  laid  schemes  o'  mice  an'  men  gang  aft  agleg." 

In  the  iron  links  of  the  Jerome  ring  there  was  one 
flaw  which  had  escaped  the  eyes  of  the  shrewd  leader. 
The  charter,  or  the  by-laws  of  the  Old  Southern 
Company  permitted  an  increase  in  the  amount  of  the 
capital  stock  by  vote  of  the  directors. 


260  IXSIDE    LITE  IN  WALL   STREET. 

Within  a  few  hours  after  the  return  of  Keep  from 
Saratoga,  a  further  issue  of  fourteen  thousand  shares 
was  authorized  by  the  directors  in  secret  session. 
The  new  stock  certificates  were  made  out  and  every- 
thing was  ready.  But  it  would  never  answer  to  send 
out  these  new  stock  certificates  without  disguise.  In 
that  case  the  market  would  know  of  it  too  soon.  The 
price  would  fall  and  the  Old  Southern  Company  would 
fail  to  derive  the  full  benefit  which  they  hoped  would 
accrue  from  the  selling  the  new  stock  at  so  high  a 
price,  and  the  great  bear  movement  of  Keep  would 
be  a  failure.  Accordingly  the  necessary  amount  of 
stock  was  borrowed  from  the  ring  and  sold.  This 
created  the  impression  that  a  heavy  short  interest 
was  being  developed  and  completely  blinded  the  ring. 
In  addition  to  the  shares  of  the  new  issue,  Keep 
went  short  of  the  stock  on  his  own  account  to  an 
enormous  amount,  and  then  stood  and  watched  the 
market.  Not  long,  however. 

September  drew  near  and  a  delicate  pressure  be- 
gan to  be  felt  in  the  money  market.  Many  of  the 
heavy  holders  began  to  talk  about  realizing  their 
profits,  but  as  the  prices  began  to  yield  they  waited 
for  them  to  rise  aga!n. 

Such  is  the  custom  of  operators  who  cannot  bear 
to  face  a  loss,  however  small.  They  waited  too  long, 
for  stocks,  instead  of  regaining  the  summit  price, 
sagged  down  lower.  To  Secretary  Chase  has  been 
attributed  two  great  panics,  that  of  September,  1863, 
and  that  of  April,  1864.  Whether  or  not  with  rea- 
son, we  will  not  say.  But  certain  it  is,  that  he  came 
into  the  market  in  Wall  Street  in  August,  1863,  for 
a  loan,  and  early  in  September  he  secured  from  the 


OLD   SOUTHERN   "SLUMPS."  261 

banks  a  loan  of  $35,000,000,  and  now  the  Old  South- 
ern trap  was  sprung.  The  entire  lot  of  fourteen 
thousand  shares,  was  used  to  repay  the  borrowed 
stocks.  The  money-lenders  tightened  their  hold 
of  their  cash-boxes;  the  interest  ran  up  three  per 
cent.  In  one  day,  stocks  fell  from  ten  to  twenty 
per  cent.  The  next  day  they  fell  ten  per  cent, 
lower.  Harlem  and  Hudson  came  toppling  down 
from  Alpine  heights.  Erie  fell  down  with  a  rush, 
and  struck  99.  But  Old  Southern  came  down  like 
an  avalanche.  Jerome's  personal  losses  were  said  to 
have  been  nearly  one  million  dollars,  his  prestige  was 
destroyed  and  after  that  his  power  ceased  to  be  felt  in 

the  market.  As  for  the  P Pool  which  hoped  to 

swallow  Uncle  Daniel  and  his  strong  box,  it  was 
utterly  annihilated.  Some  of  the  members  of  that 
combination  still  haunt  the  market,  mere  shadows  of 
operators,  without  money,  or  credit  or  even  decent 
habiliments.  Daniel  Drew  covered  his  shorts  with 
an  immense  profit 

The  first  thing  a  loser  in  Wall  Street  does,  after  a 
heavy  stroke  of  bad  luck  is,  to  find  fault  with  his 
broker.  The  second  thing  he  does  is,  to  curse  his 
luck.  The  third  thing  he  does  is,  to  gather  together 
the  wreck,  and  get  ready  for  another  venture  on  the 
treacherous  waves. 

In  accordance  with  this  programme,  I  held  a  con- 
ference with  my  broker,  in  his  private  room,  out  of 
ear-shot  of  his  clerks,  for  I  wished  to  spare  his  feel- 
ings, so  far  as  a  broker  may  be  said  to  have  feelings. 
He  was  a  big  man.  His  personal  presence  was  over- 
powering. He  was  seated  in  a  large  chair.  The 
province  of  big  men  like  him  seems  to  be  to  sit  in 


262  IXSIDE    LIFE  IN   WALL   STREET. 

large  chairs,  and  take  change,  as  one  of  the  editors 
of  a  New  York  newspaper  once  remarked  to  me. 
His  face  was  that  of  a  globose  Jupiter  Tonans. 
Every  wrinkle  seemed  large  enough  to  form  the 
grave  of  a  small  margin,  all  in  the  way  of  legitimate 
commission  business.  His  principal  occupation  ap- 
peared to  be  smoking  monstrous  regalias,  and  signing 
checks. 

When  a  broker  reaches  the  dignity  of  a  daily  check 
signer  for  a  million  dollars,  he  may  be  said  to  have 
drunk  the  full  cup  of  such  bliss  as  Wall  Street  life  can 
give.  The  mere  fact  that  a  man  is  daily  signing  his 
name  to  twenty  or  thirty  bits  of  paper,  all  of  which  are 
certified  as  good  by  his  bank,  and  each  one  of  which 
can,  on  presentment  at  the  counter,  be  exchanged  for 
forty  thousand  dollars  in  crisp  greenbacks,  conveys 
to  an  observer's  mind,  an  idea  of  mysterious  power. 
My  broker  sat  in  his  private  room  that  day,  signing 
checks  for  untold  amounts,  as  coolly  as  though  he 
were  scribbling  his  name  in  pure  chirographical  wan- 
tonness. I  waited  for  him  to  finish  his  task  before 
I  opened  my  broadside.  Just  as  he  was  putting 
the  final  flourish  on  the  last  check,  he  opened  his 
lips  and  let  drop  one  word,  "well!"  This  was  to 
let  me  know  that  he  had  the  floor,  and  was  about 
to  speak.  Then  he  laid  the  pen  down,  removed  the 
huge  cigar  from  between  his  lips,  blew  an  immense 
volume  of  smoke  from  his  mouth,  looked  at  me 
through  it  as  it  circled  to  the  ceiling,  rose  from  his 
seat  and  continued : 

"I  am  going  out  to  get  something  to  eat,  come 
along." 

This  "getting  something  to  eat,"  after  the  heavy 


DINING   AND    WINING  A   CUSTOMER.  263 

labors  of  the  day,  means  in  Wall  Street  parlance,  an 
elaborate  dinner  with  all  the  etceteras,  or  at  least  an 
elaborate  lunch. 

My  guns  were  spiked  by  this  hospitable  invitation, 
but  were  still  loaded  and  threatening.  I  held  my 
peace,  and  without  more  ado  we  wended  our  way  to 
the  neighboring  chateau  of  Delmonico.  My  heavy-set 
broker  had  probed  my  wound,  and  now  proceeded  to 
apply  healing  lotions.  Twice  I  began  a  sentence,  half 
expostulatory,  half  indignant;  and  twice  I  was  inter- 
rupted by  his  stopping  business  acquaintances  and  ad- 
dressing them  in  a  jocular  strain. 

We  reached  Delmonico's,  and  elbowing  our  way 
through  a  group  of  florid,  coraline-nosed  individuals, 
whose  principal  occupation  between  the  hours  of  ten 
A.  M.  and  four  p.  M.,  seems  to  be  standing  very  erect 
in  the  lower  room  of  that  far  famed  restaurant,  look- 
ing very  jolly,  and  taking  brandy  straight  at  regular 
intervals.  We  sat  down  at  one  of  the  little  tables. 
A  waiter  flew  to  us,  as  waiters  always  do  at  Del- 
monico's, when  well  known  heavy  feeders  and  sip- 
pers  make  their  appearance.  He  chattered  like  a 
monkey  in  a  southern  forest,  seized  our  plates  and 
polished  them  with  his  napkin  till  they  shone  again, 
then  fairly  bewildered  our  ears  with  the  names  of 
a  host  of  dishes,  all  smoking  hot,  and  waiting  the 
pleasure  of  Messieurs,  beneath  as  many  smoking  tins. 

"  We  will  take  soup  a  la  Julien." 

"Oui!  oui!" 

"Then  a  little  fish— Spanish  mackerel."  v 

"Oui!  oui!" 

"A  bottle  of  haut  sauterne  with  the  fish.  After 
that  we  will  take  a  filet  of  beef  with  mushrooms;  then 


264  INSIDE    LIFE  IX   WALL    STREET. 

game,  the  half  of  a  grouse.  Vegetables,  of  course ; 
potatoes  lyonaise,  French  peas,  and  a  bottle  of  Cliquot, 
with  the  meats.  Then  ice-cream  meringues.  Cafe 
noir  and  petit  verre" 

In  three  minutes  we  were  under  full  headway. 
The  soup  silenced  me  with  its  trickling  juices.  The 
sauterne  mollified  me.  The  filet  and  game  equi- 
librized  me,  and  when  the  Cliquot  had  diffused  its 
genial  glow,  I  took  new  views  of  Wall  Street  life. 
The  broker  had  done  nothing  but  what  was  right  in 
selling  my  stock,  after  my  margin  had  run  down  so 
low.  The  loss  could  easily  be  made  up.  I  had 
$40,000  to  do  it  with;  it  should  be  done!  We  lay 
back  in  our  chairs  and  puffed  at  our  cigars.  We  ex- 
changed views.  We  both  concurred  in  thinking  that 
stocks  were  cheap,  particularly  Harlem.  This  last 
named  stock  had  fallen  sixty  per  cent,  from  181. 
The  Commodore  had  not  got  through  with  it,  that 
was  plain.  He  was  an  all-day  man,  and  he  would 
send  Harlem  up  kiting  yet. 

We  talked  so  long  about  it,  and  fortified  each 
other  with  such  potential  reasons  for  believing  that 
this  stock  must  rise,  that  at  last  we  considered  it  a 
foregone  conclusion.  Then  we  rose  from  the  table, 
and  passed  out  into  the  street.  The  Boards  had  both 
adjourned.  The  crowd  was  buzzing  as  usual  on  the 
sidewalk.  Stocks  were  quoted  firm,  with  an  upward 
tendency.  The  votaries  of  Harlem  began  to  recover 
faith  in  their  Magnus,  Apollo — the  Commodore,  and 
once  more  filled  the  street  with  rumors  of  another 
great  rise  in  the  stock. 

"You  see,"  remarked  one  enthusiast,  "A.  G. 
Jerome  had  to  pitch  overboard  all  the  Harlem  he 


"BUCKING  AT  HARLEM."  265 

was  carrying,  when  Old  Southern  broke.  The  Com- 
modore hasn't  sold  any  stock.  They  (the  ring,)  are 
picking  up  all  the  loose  stock.  There  is  one  of  Van- 
derbilt's  brokers  now  buying  everything  offered  un- 
der 120.  The  next  hitch  will  be  200." 

A  part  of  these  remarks  were  whispered  in  the  ear 
of  my  broker,  who  immediately  bought  two  thousand 
shares,  on  his  own  account.  This  amount  he  gener- 
ously offered  to  share  with  me,  and  his  offer  was  ac- 
cepted promptly. 

One  thousand  shares  of  Harlem  at  120,  cost  sixty 
thousand  dollars,  for  as  already  noted,  this  stock 
is  only  fifty  dollars  per  share,  at  par.  This  amount 
of  stock  was  placed  to  my  account  on  the  broker's 
books. 

"This  Harlem,"  said  my  broker,  "I  shall  consider 
as  a  kind  of  permanent  investment,  at  all  events,  I 
shall  not  sell  it  for  less  than  198." 

One  thousand  shares  of  Harlem,  bought  at  120, 
and  sold  at  198,  (for  it  is  never  best  to  wait  for  the 
highest  point,  which  was  agreed  to  be  200)  would 
show  a  profit  of  $39,000.  This  would  go  towards 
wiping  out  that  loss  of  $61,000. 

The  position  of  this  notorious  stock  was,  in  the  fall 
of  1863,  very  peculiar.  It  had  been,  the  past  six 
months,  the  double-edged  sword  of  the  market,  held  in 
the  hands  of  the  Commodore.  The  bears  had  first 
been  cut  down  like  grass,  then  the  legs  of  the  bulls 
were  hewn  in  two.  What  was  singular,  the  men  who 
had  gone  short  of  the  stock  during  the  spring  and 
summer  were  now  buying  it  for  a  rise  while  many  of 
those,  who,  during  the  same  period,  had  operated  in  it 
for  a  rise,  were  selling  it  now  in  expectation  of  a  fur- 


266  INSIDE    LIFE  IN  WALL   STREET. 

ther  decline.  Its  future  depended  on  two  things,  viz. : 
a  decision  of  one  of  the  judges  of  the  Supreme  Court 
and  the  action  of  the  Common  Council  of  the  city  of 
New  York,  respecting  the  street  franchise  grant.  Af- 
ter a  few  rapid  vibrations,  it  fell  to  110.  The  stock 
looked  weak.  I  wished  I  was  out  of  it.  But  I  dared 
not  face  a  loss  of  §5,000  which  had  already  accrued. 
One  desperate  expedient  remained.  I  could  buy  one 
thousand  shares  more  at  110  and  then  as  soon  as  it 
rose  to  115,  sell  out  the  two  thousand  shares  without 
any  loss  except  two  or  three  hundred  dollars  broker- 
age and  interest,  for  carrying  the  stock. 

I  bought  one  thousand  shares  more  at  110 ! 

The  price  sunk  lower  and  lower. 

One  morning,  soon  after  this,  a  stout  red-haired 
man,  a  stranger  to  every  one,  made  his  appearance 
on  the  street,  and  offered  five  hundred  shares  of  Har- 
lem at  the  ruling  price.  No  one  took  him  up,  but 
some  one  on  the  other  side  of  the  crowd,  bid  one  per 
cent,  below  the  market  price,  and  the  red-haired  man 
cried  out,  "sold,"  and  gave  up  the  name  of  a  well- 
known  broker.  In  a  moment,  every  eye  in  the  crowd 
was  fastened  on  the  stranger. 

It  might  be  laid  down  as  a  general  proposition  that 
in  certain  conditions  of  the  market,  any  stout,  red- 
haired  man,  (who  is  a  stranger  to  the  crowd  of  ope- 
rators), appearing  oh  the  street  and  offering  to  sell 
five  hundred  shares  of  a  certain  stock  one  per  cent, 
below  the  market,  would  occasion  a  panic. 

The  stranger  in  this  case  proved  to  be  a  lawyer 
from  one  of  the  river  counties,  who  was  believed  to 
have  obtained  early  information  in  some  way,  that 
the  decision  of  Judge  Hogeboom  was  adverse  to  Har- 


SLIDING   DOWN   HILL   ON   HAELEM.  267 

lem.  As  soon  as  this  fact  became  known  to  the 
street,  Harlem  dropped  like  lead,  to  90.  On  the  heels 
of  this  decision,  came  adverse  legislation  by  the  Com- 
mon Council,  and  before  my  two  thousand  shares 
could  be  disposed  of,  the  price  had  reached  81.  Out 
of  $113,500, 1  had  remaining,  five  thousand  and  some 
odd  in  cash  on  hand,  and  the  $9,000  invested  on  a 
margin  in  the  7  3-10  bonds,  bought  as  mentioned  in 
the  last  chapter.  Should  I  sell  the  bonds  and  put  the 
proceeds  into  stock  margins?  No!  This  eight  thou- 
sand dollars  was  turning  out  to  be  one  of  the  snug- 
gest financial  snow-balls  that  was  ever  rolled,  as  will 
appear  to  the  reader,  if  he  will  examine  the  following 
account,  the  figures  being  approximate,  and  made  up 
from  memory : 

175,000  worth  of  7 ,30-  per  cent.  Government  Bonds,  at 

104,  bought  July,  1863, $182,000 

Interest  accrued  on  same,  at  7-^r  per  cent.,  (say  three 

months,)  in  currency, 2,235 

$184,235 
Which  Bonds  were   paid  for  by  a  loan  from   Savings' 

Banks,  at  par, $175,000 

Margin, 9,235 

$184,235 
Interest  on  loan,  for  four  months,  at  5£  per 

cent.,  in  currency,  on  $175,000, .     .     .     $5,616 
Interest   on   bonds,   7-^    in   gold,   for  four 

months, $8,036 

Premium  on  $8,036  gold,  sold  at  140 ,     .     .       3,214 

$11,250 
Add  2  per  cent.,  rise  in  bonds, 3,500 

$14,750 
My  net  profits  was  the  difference  between  $14,750 


268  INSIDE    LIFE  IN   WALL    STREET. 

and  the  sum  of  $5,616  interest  paid  the  savings  banks 
which  showed  the  sum  of  $9,134  in  which,  however, 
was  included  the  entire  interest  paid  in  gold,  viz.: 
$2,235.  Now,  if  gold  rose  to  200,  my  interest  on 
this  operation  which  I  regarded  in  the  light  of  a  per- 
manent investment  would  be  nearly  150  per  cent,  on 
my  margin,  to  say  nothing  of  any  rise  which  might 
take  place  in  the  price  of  the  bonds.  On  looking  at 
these  figures  my  resolution  was  confirmed  to  keep 
my  bonds.  But  what  should  be  done  to  retrieve  my 
losses?  I  would  make  one  last  venture.  In  what? 
Did  the  fickle  goddess  relent  and  whisper  something 
in  my  ear  when  one  day  after  taking  a  survey  of  the 
market,  I  gave  an  order  to  buy  five  hundred  shares  of 
Rock  Island,  at  par.  However  this  may  be,  the  stock 
was  bought  and  $5,000  margin  delivered  to  my  broker, 
with  instructions  to  sell  the  stock  if  it  fell  to  91, 
but  if  it  went  up,  to  let  my  profit  run.  Then  I  took 
a  week's  rest,  expecting  every  day  the  worst,  and 
hardly  daring  to  hope  for  the  better. 


CHAPTER  XVI. 
OPENING  THE  BALL  ON  HOCK  ISLAND. 

Bulls,  Bears  and  Changelings— How  Bears  Make  Stocks  go  Up— Dull 
Seasons,  Rises  and  Panics — Dark  Times  for  Bulls — A  Rocket  Shoots 
Up  in  the  Darkness — More  about  A.  W.  Morse — How  He  Came  to 
be  a  Broker— The  Rock  Island  Pool  Taking  in  the  Shorts— Under- 
currents— The  Financial  Outlook;  Is  it  to  be  Up  or  Down  with 
Stocks? — Loans  and  Taxation  vs.  Fresh  Currency — Two  Bears  try 
to  Cover  their  Shorts  but  Can't— A  Tantalizing  Stock— The  Story 
of  My  Five  Hundred  Shares — A  Bone-boiler's  Opinion  about  Rock 
Island— "  Boiling  Down  the  Gristle  of  the  Bears  "—The  Final 
Twist — A  Big  Profit,  and  a  Smile  all  Round. 

[HE  operators  in  Wall  Street  may  be  divided 
into  three  grand  classes.  First,  those  who 
are  by  constitution  and  temperament,  oper- 
tors  for  a  rise,  i.  e.,  bulls.  Second,  those  who  are  by 
constitution,  temperament  and  education,  operators 
for  a  fall,  i.  e.  bears.  Third,  those  who  are  bulls 
or  bears  by  turns.  This  last  class  is  by  far  the 
largest. 

As  we  have  before  remarked,  they  who  commence 
by  operating  for  a  rise  often  end  by  operating  for  a 
fall. 

A.  G.  Jerome  was  an  example  of  th'ese  converts. 
The  Napoleon  of  the  Public  Board,  after  a  career  of 
unparalleled  success,  found  his  Waterloo  in  Old  South- 
ern. Henry  Keep  was  the  Iron  Duke  who  defeated 
him  as  we  have  already  shown.  When  Old  Southern 


270  INSIDE    LIFE    IN   WALL    STREET. 

fell  to  77,  Jerome,  who  had  been  operating  for  a  rise 
with  such  success  up  to  the  time  of  that  disaster,  now 
became  a  bold  operator  for  a  fall.  He  and  his  asso- 
ciates in  the  clique,  turned  about  and  sold  Old  South- 
ern short.  Their  losses  on  both  these  operations 
were  rated  at  $2,500,000.  But  Jerome  was  only  one 
of  a  host  of  men  who,  having  lost  heavily  on  the 
bull  side,  by  the  panic  of  September  3d  and  4th,  now 
changed  their  policy,  and  prepared  hereafter  to  act  as 
bears.  It  should  be  remembered,  that  bears  play  an 
important  part  in  assisting  every  great  rise,  by  creat- 
ing a  demand  for  the  stocks  which  they  have  sold 
for  future  delivery.  This  fact  should  be  noted  in 
connection  with  what  we  have  to  describe  here- 
after. 

In  accordance  with  the  traditions  of  Wall  Street, 
the  fall  of  the  year  is  the  dull  season  in  stocks.  The 
reason  for  this  may  be  stated  thus :  the  money  which 
flows  into  the  banks  of  New  York  City,  from  all  parts 
of  the  country,  at  other  seasons  of  the  year,  is  with- 
drawn largely  in  the  fall  by  its  owners,  for  the  pur- 
pose of  using  it  in  different  ways.  One  of  these 
ways  is  the  moving  to  market  of  the  crops  of  the 
West  and  South.  In  a  few  weeks,  or  at  most,  months, 
the  money  begins  to  flow  back,  and  seek  employment 
and  investment  in  New  York.  The  banks  and  other 
money-lending  institutions,  also  call  in  their  loans 
late  in  the  fall  or  early  in  the  winter,  prepara- 
tory to  making  their  January  dividends.  Hence  it 
is,  that  operators  generally  shorten  sail  in  the  au- 
tumn, during  which  season  the  stock  market  is  dull. 
These  dull  seasons  are  the  breathing  spells  of  the 
market  between  its  great  rises  and  corresponding 


A  FEEBLE  EFFORT  AND  ITS  FAILURE.     271 

falls,  which  might   be  illustrated   by  a  diagram  as 
follows,  viz.  : 


From  September  4th  till  December  16th,  nothing 
occurred  that  was  noteworthy  in  the  course  of  prices, 
except  the  break  in  Harlem.  But  Harlem  was  looked 
upon  now  as  a  specialty  quite  unconnected  with  the 
general  market.  During  all  this  period,  the  bear 
party  were  daily  growing  stronger  and  more  clam- 
orous. Everything  seemed  to  work  in  their  favor. 
The  banks,  alarmed  by  the  wild  speculations  in  stocks 
and  gold,  and  noting  the  periodical  panics  which  had 
occurred,  were  all  this  time  contracting  their  loans 
and  discouraging  stock  operations.  The  financial 
movements  of  the  government  in  the  direction  of 
fresh  loans  to  be  negotiated  in  New  York,  were  held 
in  dread  by  the  operators.  The  press  thundered 
forth  in  its  money  articles,  denunciations  of  the  stock 
bubble  and  its  engineers,  accompanied  with  words  of 
prediction  of  and  warning  against  the  speedy  collapse. 
Under  these  circumstances,  the  bulls  found  it  difficult 
to  lift  prices.  In  November,  and  early  in  December, 
they  made  a  feeble  effort  which  failed,  and  left  them  in 
a  worse  condition.  The  confidence  of  the  public  in  the 
upward  tendency  of  values  was  more  than  impaired. 

The  five  hundred  shares  of  Rock  Island,  mentioned 
in  the  last  chapter,  was  bought  on  its  intrinsic  merits, 
after  a  break  in  the  market,  on  the  9th  of  December. 
How  dark  and  cheerless  everything  looked  that  day ! 
The  sun  hardly  shone  through  the  leaden  sky  upon 
the  stagnant  market.  For  a  week,  Wall  Street  specu- 
17 


2  72  INSIDE    LIFE   IN   WALL   STREET. 

lation  looked  like  a  dead  sea,  and  the  financial  air 
grew  closer  and  darker.  Suddenly,  out  of  this  level 
waste,  something  shot  up  like  a  rocket  with  a  bengal 
light  fastened  to  its  tail !  The  bull  carnival  had  been 
ushered  in  by  the  rise  of  Rock  Island !  This  move- 
ment startled  men  by  its  brilliancy,  but  inspired  fresh 
confidence.  It  was  the  harbinger  of  another  great  rise. 
Its  leader  was  hailed  by  the  bulls  with  acclamation. 
The  name  of  A.  W.  Morse  rang  through  the  street. 

After  an  interregnum  of  seven  months,  he  again 
took  the  throne,  as  king  of  the  Regular  Board,  and  of 
the  street,  to  maintain  his  blazing  reign  till  the  follow- 
ing April.  Now  the  outside  public  began  to  inquire 
who  he  was.  It  appeals  that  in  1860,  he  was  a  clerk 
in  a  mercantile  house,  and  was  employed  by  them  to 
go  down  into  Wall  Street,  to  negotiate  their  paper, 
and  look  after  their  money  matters  there. 

One  day  a  gentleman  connected  with  a  large  firm 
in  the  street,  noticing  the  rapidity  with  which  he  ran 
up  columns  of  figures,  and  the  general  sharpness  and 
accuracy  of  his  mental  operations,  views  on  stock, 
etc.,  asked  him  why  he  did  not  come  into  "Wall  Street, 
and  commence  business  on  his  own  account.  Morse 
replied  that  he  had  no  capital.  The  gentleman  told 
him,  that  with  talents  like  his,  he  could  go  on  with- 
out capital,  and  that  most  of  the  successful  brokers 
commenced  with  little  or  no  money.  "Money,"  said 
he,  "will  flow  into  the  hands  of  the  Wall  Street  man, 
who  has  the  qualities  of  shrewdness,  activity,  and 
boldness.  Don't  wait  another  day,  but  take  a  little 
office  near  the  Stock  Exchange,  and  get  admitted 
into  the  board  as  soon  as  you  can."  On  this  advice, 
Morse  acted  without  delay.  In  three  years  he  had 


THE   ROCK   ISLAND   KOCKET.  275 

risen  to  be  the  leader  of  the  board,  during  the  Chan- 
cellorsville  rise,  and  he  was  now  the  fugleman,  who 
formed  the  bulls  into  one  compact  and  obedient  pha- 
lanx, moving  up  the  heights  of  the  market  in  1864. 

He  was  the  most  dashing  operator  ever  known  in 
Wall  Street.  In  buying  stocks  he  rarely  seemed  to 
cover  his  hand.  The  heavy  dealers  held  him  at  first 
in  low  estimation.  His  bodily  appearance  was  so 
slight  and  frail,  his  air  so  jaunty  and  holiday-like,  his 
money  resources  seemed  so  inadequate  to  what  he 
undertook,  that  when  after  buying  quietly  as  much 
Rock  Island  as  he  could  pick  up,  he  came  out  boldly, 
bid  for  heavy  blocks  of  the  stock  at  107-109,  the  old 
money  kings  of  the  board  sold  him  all  he  bid  for, 
laughing  in  their  sleeves  at  the  "blind  confidence" 
of  this  wild  speculator,  and  when  the  price  fell 
back  to  105,  cries  of  derision  were  heard  all  through 
the  street.  From  this  point  it  rushed  to  114,  with 
enormous  transactions.  The  whole  capital  stock, 
$6,000,000,  is  said  to  have  been  bought  and  sold 
twice  over  in  a  week.  Neither  buyers  nor  sellers 
abated  their  confidence,  the  former  in  the  continued 
upward  movement,  the  latter  in  the  ultimate  down- 
come,  coupled  with  a  firm  belief  in  the  insanity  of 
their  rivals.  Morse  kept  buying  it  by  the  thousand 
shares,  buyer  thirty,  seller  thirty,  cash,  regular  or  in 
any  way  he  could  get  it  best.  The  more  conservative 
members  of  the  board  prognosticated  his  speedy 
downfall. 

"Morse  will  get  bit;"  "Morse  will  be  saddled  with 
the  whole  capital  stock;"  "Morse  will  break;" 
"Morse  is  crazy;"  these  remarks  passed  around  the 
bear  conclave. 


276  INSIDE    LIFE    IN   WALL    STREET. 

But  the  pool  in  Rock  Island  was  stronger  than 
these  confident  and  prophetic  gentlemen  dreamed. 
It  comprised,  besides  the  brave  leader  and  manipula- 
tor, a  Washington  banker,  an  eminent  railroad  capi- 
talist and  financier,  and  a  wealthy  retired  California 
merchant,  besides  ten  or  twelve  other  operators. 
There  was  money  enough  pledged  to  carry  the 
entire  stock  on  a  twenty  per  cent,  margin,  i.  e., 
$1,200,000.  When  the  price  struck  116,  the  pool 
is  said  to  have  held,  in  actual  stock  or  contracts,  thirty- 
nine  thousand  shares.  These  contracts  were  buyers' 
and  sellers'  options,  for  three,  five,  ten,  fifteen,  thirty 
and  sixty  days.  As  fast  as  they  fell  due  they  were 
renewed  by  the  still  confident  bears. 

A  little  lull  now  took  place  in  the  price,  which 
languidly  moved  between  114  and  118.  But  though 
Morse  no  longer  bid  personally  for  the  stock,  he  was 
not  idle.  In  the  nobbiest  of  sack-coats,  his  face  a 
little  thinner,  and  his  nose  a  little  more  hooked  than 
usual,  he  could  have  been  seen  flying  from  bank  to 
bank,  or  standing  behind  his  desk,  adding  up  figures 
like  the  lightning  calculator,  or  making  playful  bids  for 
one  or  two  hundred  shares  of  Rock  Island,  or  offering 
to  sell  ten  thousand  shares  in  one  lot,  at  two  per  cent, 
below  the  market.  All  this  time  his  agents  were  at 
work,  taking  every  new  contract  offered,  now  bidding 
up  the  price,  and  now  dropping  it  to  entice  more  shorts. 

The  members  of  the  Pool  began  to  find  fault  with 
Morse,  and  ask  why  he  did  not  put  up  the  price. 
"Leave  that  to  me,"  he  would  reply,  "and  I  will  make 
all  your  fortunes."  When  they  importuned  him  to 
know  what  he  was  doing,  he  would  laugh  and  tell 
them  to  be'  patient,  and  ask  them  what  they  thought 


A   NEW   INFLATION.  277 

of  175  for  Rock  Island.  Here  it  should  be  noted 
that  in  the  Rock  Island  Pool,  nick-named  by  the 
bears,  the  "Blind  Confidence  Pool,"  Morse  was  the 
sole  manager.  All  his  associates  did  was  to  sign 
the  Pool  contract  and  pay  the  money  which  repre- 
sented their  interest.  After  that  they  knew  little  or 
nothing  of  what  was  going  on  in  the  stock.  This 
was  a  shrewd  policy  for  the  Pool  manager,  for  it 
deterred  his  associates  from  operating  on  the  stock 
outside,  to  the  prejudice  of  the  combination.  They 
dared  not  buy  the  stock,  for  fear  of  a  break,  and 
still  less  dared  they  to  go  short  of  it. 

The  money-market,  during  the  month  of  Decem- 
ber, had  been  by  fits  and  starts,  cheap  and  dear;  cap- 
italists were  timorous.  But  when  January  came, 
there  was  for  a  while  a  steady  stringency,  and  still 
stocks  stood  firm. 

It  was  Morse  standing  on  the  "perilous  edge"  of 
the  battle  in  December,  that  held  the  market  up,  by 
the  moral  effort  of  his  thus  far  successful  move. 

One  fear  hung  over  the  bears  like  a  thunder-cloud. 
It  was  the  fear  of  the  new  issue  of  $400,000,000  le- 
gal tenders,  authorized  in  March,  but  a  small  part  of 
which  had  yet  been  set  afloat.  The  Government  had 
shrunk  from  doing  this  as  long  as  possible.  Now  it 
looked  as  if  it  must  be  done.  The  currency  of  the 
country  would  in  that  case  be  $1,000,000,000.  This, 
to  the  Wall  Street  man,  would  signify  a  new  and  un- 
paralleled era  in  speculation. 

The  panic  of  the  preceding  September  had  been 
precipitated  by  a  loan  made  by  the  banks  to  the 
government  on  $50,000,000  of  the  new  legal  tender 
five  per  cent,  notes,  and  as  the  policy  which  had  been 


278  INSIDE    LIFE   IN   WALL    STKEET. 

pursued  by  Secretary  Chase  for  the  past  four  months 
was  that  which  contemplated  the  raising  of  money  by 
loans  and  taxation,  rather  than  by  the  issue  of  fresh 
currency,  the  bears  had  been  flattering  themselves  on 
the  prospect  of  a  continued  tightness  in  the  money  mar- 
ket from  the  absorption  of  the  floating  currency  in  the 
five-twenties  and  other  government  loans.  The  result 
of  this  state  of  affairs  would  finally  be,  lower  prices  in 
the  stock  market.  Such  were  the  grounds  on  which 
a  host  of  bears  had  been  resting  ever  since  September. 

But  a  new  loan  at  a  lower  rate  of  interest  (the  ten 
forties)  would  have  to  be  soon  placed  upon  the 
market.  Would  the  public  subscribe  to  it  if  money 
were  not  made  easier,  i.  e.f  if  new  currency  were  not 
issued  ?  The  financial  policy  of  the  Secretary  may 
be  best  described  by  a  simile.  The  government 
loans  may  be  likened  to  so  many  different  vessels, 
large  and  small.  The  legal  tenders  may  be  likened 
to  the  waters  in  which  those  vessels  were  to  be  floated. 
The  lower  the  interest  of  the  bonds  the  more  difficult 
to  get  them  taken  by  the  people,  just  as  the  lower 
the  vessel's  keel  sinks  the  more  depth  of  water  re- 
quired to  float  her. 

This  was  the  question  about  which  the  bulls  and 
bears  differed.  The  bulls  had  decided  already  that 
$1,000,000,000  millions  of  notes  would  soon  be  afloat. 
Morse  foresaw  it  clearly  when  he  made  his  apparently 
desperate  venture  in  Rock  Island.  The  shrewdest 
of  those  men,  who  had  been  selling  stocks,  began  to 
take  the  same  views  and  would  have  acted  upon 
them  by  turning  right  about  face  and  buying  for  a 
rise,  but  for  one  little  circumstance.  If  they  bought 
in  their  shorts  they  would  have  to  do  so  at  a  h*avy 


THE    BULLS    TRIUMPHANT.  279 

loss.  They  dared  not  look  their  losses  boldly  in  the 
face ;  they  dared  not  confess  they  were  in  the  wrong. 
Avarice  and  vanity  made  cowards  of  them. 

Here  let  us  note,  that  as  long  as  his  contracts  re- 
main open,  the  Wall  Street  man  is  buoyed  up  by  what 
is  so  often  his  evil  genius,  viz. :  Hope — hope,  either 
that  his  gains  will  be  greater,  or  his  losses  less.  He 
cannot  bear  to  fix  his  eyes  on  those  terrible  accounts, 
rendered  to  him  by  his  broker,  with  the  long  columns 
of  interest,  commissions  and  margins,  all  swallowed 
up  in  that  voracious  stock-market.  When  his  ac- 
count is  handed  to  him,  if  it  shows  a  loss,  he  will 
fold  it,  and  thrust  it  into  his  most  secret  pocket, 
without  even  looking  at  the  "  demnition  total."  Suc- 
cessive accounts,  each  showing  losses,  are  like  suc- 
cessive blows  of  some  demon-hammer,  upon  his 
sensitive  nervous  system.  Even  the  iron  nerves  of 
Daniel  Drew  quiver  under  it.  It  appears  that  he 
keeps  several  different  accounts  at  his  brokers,  en- 
titled thus,  viz.:  "Erie  account,"  "North-west  ac- 
count," etc.,  etc.  When  he  makes  a  loss  on  one 
account,  he  is  wont  to  put  it  down  on  some  one  of 
the  other  accounts,  which  shows  a  profit,  as  if  he 
would  juggle  himself  out  of  the  idea  that  he  has 
made  any  loss. 

On  the  5th  of  January,  1864,  the  long  pending 
question  between  the  bulls  and  bears,  was  decided  in 
favor  of  the  former.  $20,000,000  of  the  new  interest 
bearing,  five  per  cent,  legal  tender  notes,  were  re- 
ceived by  the  banks  of  Philadelphia,  New  York  and 
Boston. 

Two  days  before  this,  and  while  Rock  Island  was 
selling  at  123,  two  prominent  bears,  who  were  short 


280  INSIDE    LIFE   IN   WALL    STREET. 

of  the  stock  fifteen  per  cent,  below  that  figure,  re- 
ceived a  telegram  from  Washington,  informing  them 
that  several  millions  of  the  new  notes  were  to  be 
sent  to  New  York  on  the  next  day.  They  promptly 
gave  orders  to  their  brokers,  to  cover  at  1231.  This 
was  their  limit,  and  but  for  an  unfortunate  accident, 
their  order  might  have  been  executed.  The  mes- 
sage was  intercepted  by  the  enemy.  It  had  been  car- 
ried by  a  small  boy,  one  of  those  rattle-pated  little 
urchins,  too  often  entrusted  with  important  messages 
in  Wall  Street.  While  on  his  way  to  the  brokers, 
he  was  seen  by  an  agent  of  Morse,  scuffling  with 
one  of  his  mates.  A  moment  after,  he  dropped  a 
slip  of  paper,  which  Morse's  agent  picked  up,  read,  and 
handed  it  back  to  the  boy,  who  thereupon,  scuttled 
away  to  do  his  errand.  In  sixty  seconds  from  that 
moment,  Morse  knew  that  two  prominent  bears  had 
given  an  order  to  cover  several  thousand  shares  of 
Rock  Island  at  1231.  In  sixty  seconds  more,  two 
brief  notes  had  been  dispatched;  one  to  his  agent 
who  bought  and  sold  for  him  in  the  street,  the  other 
to  his  agent  representing  him  in  the  Public  Board. 
The  purport  of  these  notes  was,  not  to  let  Rock  Is- 
land go  below  124,  and  if  any  one  came  in  to  buy 
at  the  market  price,  to  bid  the  price  up  all  the  time, 
and  buy  everything  that  was  offered.  He  himself 
attended  to  matters  in  the  Regular  Board.  The  two 
bears  finding  themselves  unable  to  cover,  kept  giving 
fresh  orders,  one  quarter  per  cent,  above  the  market, 
124£,  125^,  126|.  But  just  as  they  were  going  to 
lay  their  hands  on  the  stock  as  they  fondly  hoped,  it 
danced  away  from  them,  till  it  reached  129.  These 
orders  in  accordance  with  a  Wall  Street  custom,  were 


ROCK   ISLAND   ONCE   MOKE.  281 

only  in  force  during  the  particular  session  of  the 
board,  held  immediately  after  they  were  given. 
When  they  ceased  giving  orders,  the  stock  price 
remained  quiet,  or  fell  off  a  trifle. 

Let  us  leave,  for  a  while,  these  brothers  in  misfor- 
tune, cutting  their  financial  throats  by  the  penny- 
wise  and  pound-foolish  policy,  of  limiting  their  broker 
in  the  price  at  which  he  was  to  buy,  blissfully  uncon- 
scious of  the  hawk-eyes  which  watched  their  every 
motion,  and  return  to  the  story  of  the  five  hundred 
shares  of  Rock  Island,  bought  by  me  on  the  9th  of 
December,  at  101. 

Morse's  office  in  1864,  was  in  William  Street,  nearly 
opposite  to  one  of  the  entrances  to  the  Regular  Board. 
It  was  a  small  room,  more  like  a  niche  in  the  wall 
than  a  banking  office,  in  which  operations  were  soon 
to  be  carried  on,  the  results  whereof  were  destined 
to  shake  the  stock  market  to  its  very  center.  As 
there  was  little  space  inside  to  accommodate  the  nu- 
merous customers  which  began  to  flock  thither,  attrac- 
ted by  the  fame  of  the  bull  leader,  and  hoping  to 
build  their  fortunes  upon  it,  these  gentry  were  wont 
to  stand  outside  upon  the  flag-stones  which  descended 
into  the  street,  and  a  singular  looking  group  they 
were.  Among  them  I  had  often  noticed  a  man  with 
a  carbuncular  nose  who  was  continually  standing  sen- 
try at  that  particular  spot,  and  seemed  to  act  as  if 
he  knew  something  about  what  was  going  on. 

One  morning  after  Rock  Island  had  risen  to  129, 
and  deeming  now  that  my  profits  had  been  let  run 
so  long  that  this  was  the  hour  to  embrace  them,  by 
fingering  a  check  for  $14,000  or  thereabouts,  I  was 
on  my  way  to  my  brokers,  to  give  the  necessary  order 


282  INSIDE    LIFE  IN   WALL    STREET. 

to  sell,  when  a  friend  introduced  me  to  the  carbun- 
cular  nose,  as  it  glowed  like  a  beacon  in  front  of 
Morse's  office.  The  owner  of  the  nose,  it  appears, 
was  also  the  proprietor  of  a  small,  but  extremely 
vio-orous  bone-boiling  establishment,  somewhere  up 
town.  In  this  legitimate,  but  disagreeably  odorifer- 
ous business,  he  had  amassed  the  sum  of  five  thousand 
dollars,  which  as  luck  we  uld  have  it,  had  been  recently 
staked  as  a  ten  per  cent,  margin,  on  five  hundred 
shares  of  Rock  Island.  The  first  question  I  put  to 
him  involved  his  opinion  of  Eock  Island.  As  this 
was  his  first  appearance  in  the  street  as  an  operator, 
and  not  having  yet  acquired  the  Wall  Street  habit 
of  reticence,  he  was  free  to  say  that  he  thought  well 
of  it,  he  had  made  a  little  money  on  it  and  was 
going  to  make  more. 

"Will  she  go  up?  She  hasn't  begun  to  bile  yet. 
When  she  does  bile,  she  won't  leave  a  gristle  or  a  jynt 
of  them  air  bears.  Morse  is  agoing  to  pile  on  the 
fire  and  melt  'em  all  into  soup." 

This  forcible  expression  of  his  opinion,  savoring  so 
strongly  of  the  bone-boiling  trade,  had  its  due  effect. 

I  decided  to  let  my  profits  run. 

She  did  "begin  to  bile."  The  following  Saturday, 
Rock  Island  sold  at  133.  The  two  bears  thought  of 
the  matter  over  Sunday.  Their  decision  was  made. 
Early  Monday  morning  they  gave  the  order  which 
they  ought  to  have  given  two  weeks  before.  "  Buy 
our  Rock  Island  at  the  market  price  ! " 

That  was  a  blue  Monday  for  the  ursine  tribe.  It 
was  "  twisting  day."  The  pass- word  was  "excelsior." 
At  half-past  nine  o'clock,  I  saw  Morse  standing  on  his 
office  steps,  a  strange  smile  distorting  his  face  as  he 


A   BONE-BOILEE   IX   FUNDS.  283 

looked  at  the  curb-stone  crowd,  yelling  for  Rock  Is- 
land at  140.  Before  night  it  touched  149.  The  two 
bears  settled  up  their  shorts  at  145.  The  bone-boiler 
took  his  profits  at  145.  The  writer,  the  next  day, 
was  perusing  a  deeply  interesting  volume  of  stock 
literature,  by  which  it  appeared  he  had  to  his  credit 
on  the  books  of  his  broker,  a  net  profit  of  $21,546.45, 
derived  from  the  sale  of  five  hundred  shares  of  Rock 
Island  at  145. 

Never  sell  stocks  short ! 

Always  be  a  bull !      Verb.     Sap. 

Twenty-one  thousand,  five  hundred  and  forty-six 
dollars  and  forty-five  cents! 

Here  were  the  pin-feathers  of  a  rich  plumage  for 
a  bird  so  lately  plucked !  Everybody  smiled  in  my 
broker's  office  that  morning.  The  little  errand  boy 
grinned  and  winked  as  he  darted  past  me.  The  clerks 
beamed  with  smiles.  The  book-keeper  simpered,  as 
he  graciously  allowed  me  to  feast  my  eyes  on  my  ac- 
count in  his  ledger,  which  expanded  before  me.  I 
thought  I  could  perceive  a  slight  contortion  on  the 
stony  face  of  the  cashier,  as  he  passed  me  a  check  for 
§500  pocket  money.  And  when  I  handed  to  my 
broker  a  series  of  orders  to  buy  three  hundred  Mich- 
igan Central,  five  hundred  Illinois  Central,  four  hun- 
dred Old  Southern,  all  at  the  market  price,  his  counte- 
nance was  one  conglomeration  of  smiles  as  he  looked 
down  the  vista  of  my  future  commissions.  He  punched 
me  in  the  ribs,  joked  me  about  Old  Southern  and 
Harlem,  vowed  that  I  would  have  revenge  on  them 
yet,  and  finished  by  inviting  me  to  go  with  him  to 
Delmonico's  at  four  p.  M.  sharp,  to  take  soup  and  wet 
my  profit  with  bumpers  of  Roederer. 


CHAPTER  XYH. 

THE  GREAT  RISE  OF  1864. 

A  Drop  in  the  Market,  in  Consequence  whereof  I  Seek  for  advice  and 
Sympathy  from  a  Broker— Tricks  of  Wall  Street  Trade— He  "  Can't 
Stand  the  Press" — Forming  Cliques  and  Pools — The  Bull-leader 
Tries  to  Break  the  Market — Bulling  Erie  and  Catching  Uncle  Daniel 
in  the  same  old  Trap — Morse  on  the  War-path — A  Quartette  of 
Operators  Plan  a  Campaign — Getting  into  Pools  and  Collecting 
Information— The  Press  Puts  the  Fact  Before  the  People— The 
Countrymen  in  Wall  Street — Scenes  on  'Change — Our  Little  Ex- 
cursion "  Up  in  a  Balloon,  Boys  " — Hauling  in  the  Profits — Flyers 
in  General,  and  Our  Flyers  in  Particular — The  Canton  Pool — Visit- 
ing Our  Property  in  East  Baltimore — E Makes  an  Address  to 

the  Committee  on  Canton  Stock. 

(HE  general  market,  awakened  from  its  long 
lethargy  in  December,  by  Morse's  Rock  Is- 
land pyrotechnics,  began  in  January  to  throb 
and  stir  with  a  strange,  feverish  life. 

The  next  stage  was  to  be  frenzy. 

The  three  hundred  shares  of  Michigan  Central,  cost 
me  132  ^.  The  five  hundred  shares  of  Illinois  Central, 
cost  me  125.  The  four  hundred  shares  of  Old  South- 
ern, cost  me  87 i.  In  one  week,  the  first  named  of 
these  stocks  was  selling  at  139,  the  second,  at  132  and, 
the  third,  at  90.  I  could,  by  selling,  have  realized  a 
profit  of  $6,450 ;  instead  of  which,  I  bought  twice  the 
amount  of  my  first  purchase.  All  at  once,  money 
tightened  up  to  ten  per  cent.,  and  in  a  few  hours  Michi- 
gan Central  had  fallen  to  126,  Illinois  Central  to  124, 


A   SYMPATHETIC   BROKER.  285 

and  Old  Southern  to  86.  .If  I  sold  my  stocks  now,  my 
loss  would  be  $20,900,  besides  interest  and  brokerage. 

When  a  heavy  loss  stares  him  in  the  face,  a  man  is 
apt  to  seek  advice  and  sympathy  from  his  broker. 
Seeking  advice  and  sympathy  from  brokers,  when 
margins  are  diminishing,  is  like  gathering  grapes  from 
thorns,  and  figs  from  thistles.  Instead  of  smiles,  I 
now  saw  only  dark  looks  in  my  broker's  office.  The 
market  was  panicky;  a  further  decline  of  4^  per 
cent.,  and  I  should  be  laid  on  my  back  once  more. 

That  globose  face,  which,  ten  days  before,  was  ra- 
diant with  smiles,  was  now  overcast  and  lowering. 

Why  do  brokers'  faces  look  black  when  their  cus- 
tomers' margins  have  nearly  run  out  ? 

Tricks  of  the  trade ! 

When  stocks  begin  to  break,  they  often  quietly 
sell  their  customers'  stocks.  Then,  after  prices  have  de- 
clined so  far  as  to  leave  little  apparent  margin  on  the 
account,  the  customer,  quite  unconscious  that  his  stocks 
have  been  sold  at  a  much  higher  price,  finds  himself 
subjected  to  various  influences  to  induce  him  to  give 
the  order  to  sell.  His  broker  looks  glum,  and  talks  of 
tight  money,  and  the  dangerous  condition  of  the  mar- 
ket. If  the  customer  gives  the  order  to  sell,  of  course 
the  broker  puts  into  his  own  pocket,  the  difference  be- 
tween the  higher  price  at  which  he  sold  his  customer's 
stock,  and  the  order  to  sell,  given  under  the  pressure 
of  those  glum  looks  and  bear  talk.  This  trick  may 
be  better  illustrated  by  the  following  little  account: 

Customer  buys  one  hundred  Erie  at  120, $12,000 

Market  begins  to  fall,  and  broker  sells  the  stock  (without 

telling  customer)  at  119. 
Stock  price  falls  to  105, 10,500 


286  INSIDE    LIFE    IN   WALL    STREET. 

Then  come  the  black  looks  and  talk  of  bad  market. 
The  customer  gets  frightened  and  says  sell.  The 
stock  has  already  been  sold  at  119,  but  the  broker 
returns  on  the  account,  100  Erie  sold  at  105,  and 
pockets  the  difference  between  119  and  105,  i.  e., 
$1,400,  which  sum  comes  out  of  his  customer's  mar- 
gin. We  do  not  allege  that  all  brokers  are  in  the 
habit  of  doing  this,  but  it  is  certainly  one  of  the  ways 
by  which  the  public  are  fleeced. 

I  was  unable  to  stand  the  pressure  of  that  lowering 
face,  and  the  doleful  tale  he  told,  respecting  the 
market ;  I  lightened  ship  by  throwing  overboard  the 
nine  hundred  shares  of  Michigan  Central  at  a  loss  of 
over  $9,000,  but  still  kept  fifteen  hundred  shares  of 
Illinois  Central,  and  the  twelve  hundred  shares  of 
Old  Southern  though  under  the  greatest  trepidation 
lest  the  market,  by  a  further  'decline,  might  clear 
away  my  remaining  margin.  Of  course  this  sale  was 
made  at  the  lowest  cash  price,  and  as  usual,  in  ten 
minutes  afterwards,  stocks  began  to  rise  again. 

Two  weeks  passed  away — two  busy  fervid  weeks. 
Money  was  pouring  into  Wall  Street  now  like  the  cata- 
ract of  the  great  lakes.  One  after  one,  stocks  had  risen 
higher  than  the  bulls  would  have  dared  to  hope  in 
bleak  December.  Even  the  colossal  bulk  of  Erie  was 
moving  upwards  with  slow  elephantine  strides.  Then 
stocks  paused.  Many  holders  thinking  that  prices 
had  culminated,  sold  out.  The  market  took  all  their 
stocks  without  budging,  and  still  it  did  not  advance 
much.  Why?  Pools  were  forming;  powerful  com- 
binations on  the  pattern  of  the  Rock  Island  pool. 
They  were  keeping  down  the  prices  till  they  had 
loaded  up.  Morse  and  his  associates  still  kept  their 


MORSE    AROUND    POOLS.  287 

grip  of  Rock  Island  and  were  taking  hold  of  Pitts- 
burg,  of  Erie  and  of  Fort  Wayne.  A  pool  in  Old 

Southern  made  its  head-quarters  in  the  office  of  L 

&  Co.  The  Commodore  and  his  friends  had  Harlem 
and  Hudson  in  hand.  Illinois  Central,  Galena,  in  fact 
nearly  every  stock  on  the  catalogue  was  passing  into 
the  hands  of  pools.  The  market  was  agitated  for  the 
moment  by  a  great  downward  movement  in  Rock  Is- 
land. In  three  days,  Morse  sold  the  bulk  of  his  Rock 
Island  between  140  and  118.  He  wished  to  break 
down  the  entire  market,  so  that  he  could  buy  other 
stocks.  He  was  preparing  to  concentrate  his  best  en- 
ergies on  Fort  Wayne  and  Erie.  The  chasm  made 
by  Rock  Island  closed  up,  and  everything  grew 
smooth  again.  Fort  Wayne  looked  heavy  for  the 
moment.  Its  leader  was  taking  a  flyer  on  Erie! 
Thia  movement  in  Erie,  had,  under  the  quiet  pur- 
chase of  Morse,  advanced  the  price  to  112.  Then 
he  tried  to  break  the  market  down  by  hurling  huge 
blocks  of  Rock  Island  and  Erie  upon  it.  But  Erie 
stood  firm. 

It  was  time  now  to  play  the  bold  game.  The  first 
move  in  this  game  commenced  at  the  Evening  Ex- 
change. 

The  Evening  Exchange  was  one  of  the  institutions 
of  the  stock  market  during  the  years  1864  and  1865. 
Some  enterprising  dealer  hired  a  room  in  the  base- 
ment of  the  Fifth  Avenue  Hotel.  Any  one  could 
have  access  to  it  by  paying  fifty  cents.  In  February 
of  the  former  year,  this  room  was  jammed  with  buy- 
ers and  sellers,  from  seven  till  nine  p.  M.,  after  which 
hour  they  adjourned  to  the  halls  and  bar-room  above, 
and  plied  their  vocation  till  midnight. 


288  INSIDE    LIFE   IN"   WALL    STREET. 

Morse  jumped  on  a  bench  in  this  basement  one 
night,  dressed  in  a  light  blue  beaver  overcoat,  and 
gracefully  waving  his  potent  hand,  bid  for  ten  thou- 
sand shares  of  Erie,  or  any  part.  No  one  "took  him 
up."  While  he  stood  there,  still  holding  open  his 
bid,  a  slim  young  man  with  dark  eyes,  darted  up  the 
steep  staircase,  rushed  into  the  hotel,  and  whispered 
to  Daniel  Drew's  broker,  who  stood  in  the  hall  ap- 
parently waiting  for  something.  "  Sell  him  the  ten 
thousand  shares,"  said  he  "  and  give  up  my  name." 

The  young  man  darted  down  into  the  basement, 
rushed  up  and  shook  his  finger  in  the  face  of  Morse, 
yelling  out,  "  I'll  sell  you  that  ten  thousand  Erie." 

Morse  nodded  his  head,  and  then  stretching  out  his 
hand,  bid  for  twenty  thousand  shares  more.  The 
crowd  knew  that  Daniel  Drew  was  selling  the  stock, 
and  shrunk  back  at  the  boldness  of  the  man  who 
dared  to  meet  the  old  man  "on  his  native  heath," 
Erie. 

In  two  days  the  whole  capital  stock  of  $11,000,- 
000  changed  hands.  The  price  ran  up  ten  per  cent. 
Morse  had  hoisted  the  huge  load  to  122,  and  the 
"Old  Man's"  account  on  that  little  operation  was  out 
$100,000. 

Men  began  to  count  on  their  fingers,  the  successful 
operations  of  Morse.  Pittsburg,  Rock  Island,  Erie; 
and  to  enquire  what  stock  this  bold  leader  would  take 
hold  of  next.  I  had  not  yet  sold  the  fifteen  hundred 
Illinois  Central,  nor  the  twelve  hundred  Old  South- 
ern, which  at  present  prices,  showed  me  a  -i^ofit  of 
something  like  $14,800.  I  bought  one  thousand 
more  shares  of  Old  Southern  at  95,  and  five  hundred 
Illinois  Central  at  134. 


A   PARTNERSHIP   IN   "POINTS."  289 

Then  I  was  joined  by  allies.  The  Saratoga  trio 

came  together  again.  E ,  who  had  retired  from 

the  market  in  disgust  after  his  losses  in  September, 
now  came  into  the  market  again,  rejuvenated  by  his 

long  rest,  and  bellowed  like  a  bull  of  Bashan.  L , 

after  being  hit  heavily  on  his  long  stocks,  had  been 
converted  to  the  bear  creed,  and  having  covered  his 
shorts  at  a  further  loss  of  $75,000,  had  determined 
hereafter  never  to  go  short,  but  always  operate  for 
a  rise. 

Our  little  coterie  received  an  accession  in  the  per- 
son of  W.  B.  C ,  a  Westerner,  with  a  heart  as  big  as 

a  bullock.  Poor  fellow  !  he  sleeps  now  the  sleep  that 
knell  of  panic  will  never  disturb.  We  laid  out  our  cam- 
paign on  the  following  plan :  Each  one  was  to  keep 
an  account  in  the  office  of  a  prominent  broker,  but  no 
two  in  the  same  office.  Each  one  was  to  get  admitted 
to  a  different  pool,  and  then  we  were  mutually  pledged 
to  furnish  each  other  with  all  the  information  we  could 

obtain  from  these  different  sources.  L opened 

an  account  with  Morse,  E with  L &  Co., 

W.  B.  C with  M &  B .  I  kept  one  ac- 
count with  my  old  broker,  and  opened  another  with 

B &  Co.  L joined  the  Fort  Wayne  ring. 

E cast  his  bread  upon  the  Old  Southern  Pool. 

"W.  B.  C entered  the  Galena  combination,  and  I 

took  five  hundred  shares  in  the  Canton  pool  at  38. 
Then  we  exchanged  "views,"  the  result  of  which 
was  that  each  one  made  outside  purchases  of  the  dif- 
ferent pool-stocks,  inside  of  which  his  mates  had  em- 
barked. I  sold  my  two  thousand  Illinois  Central  at 
135  and  bought  one  thousand  Fort  .Wayne,  five 
hundred  Galena,  and  five  hundred  Old  Southern. 

18 


290  INSIDE    LIFE  IN   WALL    STREET. 

Then  our  quartette  lay  back,  and  went  "up  in  a 
balloon." 

What  a  tremendous  moral  engine,  is  the  New  York 
press.  Every  day  this  engine  spreads  before  a  mil- 
lion readers,  and  a  thousand  minor  journals,  a  record 
of  facts.  To  say  that  the  money  articles  of  the 
Daily  Journal  of  Traffic,  the  Daily  Harbinger,  the 
Daily  Rostrum,  the  Daily  Age,  the  Daily  Orb,  the 
Daily  Letter,  the  Daily  Messenger,  etc.,  etc.,  are 
written  with  great  ability,  would  be  but  simple  jus- 
tice. If  they  sometimes  make  mistakes  in  their 
views  of  money  matters,  still,  it  cannot  be  denied, 
that  they  see  as  far  into  the  financial  grindstone  as 
any  one.  Every  day,  during  the  great  rise  of  1864, 
this  moral  engine  was  laying  before  the  people  these 
facts,  viz. :  A  thousand  millions  of  currency  will  soon 
be  circulating  through  the  country;  railroads  are 
earning  enormous  sums;  an  unprecedented  infla- 
tion is  taking  place  in  values ;  a  certain  daring 
speculator,  named  Morse,  is  setting  Wall  Street  in  a 
blaze ;  speculation  is  rampant,  and  no  one  can  pre- 
dict when  this  speculation  will  cease.  The  whole 
country  was  startled  by  this  record  of  facts.  The 
large  ear  of  the  confiding  public  was  caught.  The 
speculative  element  rushed  into  Wall  Street,  in  one 
compact  body.  Countrymen  rarely  go  short  of 
stocks;  they  are  generally  bulls.  Buy!  buy!  any- 
thing, no  matter  what!  put  in  your  greenbacks,  and 
and  pick  up  gold ! 

The  whole  street  was  lined  with  rustics.  They 
marched  in  files,  stood  in  groups,  discussed  matters 
and  then  formed  in  battalions  and  gave  their  orders 
to  buy.  Lank,  sun-burned  men,  stout  men,  with 


THE   IDOL   OF   THE   HOUR.  291 

husky  voices,  tall  short  and  middle-sized  men,  with 
country-cut  coats,  entered  the  city  in  the  morning, 
with  nothing  but  a  paper  collar  and  a  comb  in  their 
carpet  bag  and  a  small  check  on  some  city  bank,  and 
left  town  the  next  day  with  a  bundle  of  greenbacks 
larger  than  a  small  sized  encyclopedia  !  These  were 
the  lucky  ones.  Others  staid  there  for  three  months 
and  then  left  with  very  large  fleas  in  their  ears. 
Morse's  office  was  besieged.  Strangers  came  to  him 
and  thrust  portly  wallets  into  his  hand.  Shrewd 
financiers  almost  went  down  on  their  knees,  begging 
him  to  tell  them  what  to  buy,  and  forcing  upon  him 
checks  for  hundreds  of  thousands  of  dollars.  He  was 
watched  as  closely  as  if  he  were  some  great  criminal 
under  the  surveillance  of  detectives.  In  the  board  or 
on  the  curbstone,  every  shade  of  expression  in  his 
face  was  scrutinized  by  hundreds  of  sharp  eyes. 

The  other  bull  leaders  were  ably  seconding  the 
great  upward  movement.  Tobin  had  Harlem  in  hand 
for  the  Commodore.  Every  brokerage  firm  that  had 
charge  of  any  particular  stock  for  a  pool,  became  «i 
General,  urging  on  the  bull  movement.  L.  W.  Je- 
rome, though  little  seen  in  the  street,  was  operating 
enormously  for  a  rise  and  making  millions.  A  well- 
known  clergyman  laid  down  a  check  for  three  thou- 
sand dollars  on  the  desk  of  this  noted  financier.  He 
didn't  tell  him  to  buy  stocks,  oh !  no !  That  would  be 
gambling.  But  mysteriously  enough,  in  the  course 
of  a  couple  months  after,  the  same  clergyman  was 
seen  to  deposit  in  his  bank,  a  check  for  $80,000, 
signed  by  L.  W.  Jerome. 

During  the  two  months  from  the  18th  of  Febru- 
ary till  the  18th  of  April,  there  was  no  form  of  hu- 


292  INSIDE    LIFE  IN    WALL    STKEET. 

manity,  no  profession,  age,  sex  or  condition,  that 
might  not  have  been  seen  in  Wall  Street.  Even  de- 
crepitude and  disease  seemed  for  the  time  being,  to 
have  lost  their  power.  The  corridors  of  the  Stock 
Exchange  and  the  cushioned  sofas  of  the  brokers' 
offices  looked  like  the  wards  of  a  hospital,  filled  with 
limbs  palsied  and  swollen,  and  eyes  purblind,  while 
the  hectic  coughs  of  consumptives  were  echoing  the 
robust  shouts  and  yells  of  the  surging  crowd  in  Wil- 
liam Street.  Glittering  coupes  drove  up  to  the  doors 
of  the  great  banking  and  brokerage  houses,  with  fair 
dames  veiled  and  loaded  with  jewels,  who  leaned  back 
upon  the  satin-covered  cushions  and  waited  to  learn 
the  prices  of  stocks. 

Three  weeks  after  we  had  started  on  our  balloon  ex- 
cursion, we  pulled  the  valve  and  let  out  a  little  gas,  in 
other  words,  we  realized  a  part  of  our  profits  by  selling 
everything  except  our  interest  in  Fort  Wayne  and  in 
our  individual  pools.  The  Fort  Wayne  we  had  de- 
cided, must  be  held  for  150,  and  as  for  the  pool  in- 
terests, they  could  not  be  sold,  because  we  had,  on  the 
blind  confidence  principle,  surrendered  the  control  of 
them  to  the  rings  which  managed  the  different  stocks 

which  they  undertook  to  hoist.  L ,  who  was  the 

boldest  of  the  quartette,  had  realized  $89,000.  E 

$27,000,  and  W.  B.  C $22,000;  while  my  net 

profits  in  hand,  since  the  9th  of  December,  were 
$42,000. 

Then  we  said  we  would  go  up  town,  and  rest  for 
a  week.  But  we  could  not  sever  ourselves  long  from 
stocks.  Our  vacation  was  only  for  a  day.  We  all 
met  in  the  street  the  next  morning,  which  was  Mon- 
day. We  only  came  in  to  take  a  look  at  the  market. 


CHASING   BUTTERFLIES    OVER   A   PRECIPICE.     293 

We  did  not  "mean  business."  L went  into 

Morse's  office,  came  out  smiling,  and  said  lie  had  a 
point.  Fort  Wayne  was  to  be  jumped  in  a  day  or 
two ! 

By  eleven  A.  M.,  we  held  two  thousand  shares 
apiece,  which  cost  us  from  116  to  118.  The  next  day, 
just  as  twelve  o'clock  was  hammered  from  the  belfry 
of  Old  Trinity,  I  had  sold  all  my  Fort  Wayne,  at 
a  profit  of  $57,000! 

"This  is  the  end.  No  more  speculation  for  me, 
except  now  and  then  a  little  fly  err  Such  was  my  men- 
tal resolution,  as  I  deposited  $100,000  in  my  bank, 
intending  to  use  that  sum  for  permanent  investments. 
I  still  had  $20,000  in  my  broker's  hands.  This  sum 
was  to  furnish  me  my  diversion,  which  was  to  con- 
sist in  taking  flyers.  How  many  men  can  trace  their 
ruin  to  that  first  or  last  flyer!  There  is  nothing 
delusive  and  dangerous,  to  which  they  may  not  be 
likened.  That  flyer,  in  the  shape  of  one  hundred 
shares  of  stock,  is  the  maggot  in  the  brain;  the 
springe  set  for  the  woodcock;  the  gilded  butterfly, 
which  leads  its  pursuer  over  the  precipice;  the  blad- 
ders on  which  "  little  wanton  boys  "  swim  over  the 
treacherous  depths  of  a  pool;  the  rainbow  which 
hangs  over  the  roar  of  the  cataract. 

The  same  afternoon  that  the  little  fortune  had  been 
snugly  laid  away  in  the  burglar  proof  vaults  of  the 

Bank,  L brought  me  another  "point"  out 

of  Morse's  office.  A  great  many  Ohio  and  Missis- 
sippi certificates  had  lately  been  going  into  that  office. 
The  par  value  of  an  Ohio  and  Mississippi  certificate 
was  $1,000.  Ten  of  them  were  equal  to  one  hundred 
shares  of  stock.  I  bought  ten  Ohio  and  Mississippi 


294  INSIDE    LIFE  IN   WALL    STREET. 

certificates  at  49.  They  rose  to  50 ;  I  bought  fifty 
more.  They  rose  to  53 ;  I  bought  one  hundred  and 
forty  more.  Then  I  gave  my  broker  orders  to  "  sell 
them  at  65 — order  good  till  countermanded."  There- 
upon I  went  into  the  country  to  buy  a  span  of 
horses.  Not  that  I  had  a  passion  for  horses.  On  the 
contrary,  I  considered  them  very  perishable  property ; 
delicate  in  health,  and  like  a  lady  of  fashionable  cir- 
cles, rather  ornamental  than  useful.  I  had  sold  my 
horses  the  preceding  fall,  and  was  glad  to  dispose  of 
them  at  forty  per  cent,  below  what  they  cost  me. 
Still  it  is  the  thing  for  successful  Wall  Street  men  to 
own  horses  with  ranging  necks  and  long  stride,  Ham- 
bletonian  trotters  descended  from  the  Godolphin  Ara- 
bian, or  connected  by  some  dark  affinity  of  lineage 
with  Bucephalus  or  Pegasus.  Brown,  and  other  Wall 
Street  men  had  horses,  and  why  shouldn't  I. 

That  trip  to  the  country  was  not  an  agreeable  one. 
My  heart  was  not  "in  the  Highlands;"  it  was  in  Wall 
Street.  At  the  first  railroad  station  I  came  to,  on  my 
way  home,  with  my  span  of  equine  elephants,  I  bought 
a  newspaper,  and  saw  Ohio  and  Mississippi  certificates 
69 !  I  telegraphed  to  my  brokers  and  received  an- 
swer :  "  Your  certificates  sold  at  67  1 "  My  profits  on 
this  flyer  were  $29,100,  less  interest  and  brokerage. 

The  five  hundred  shares  in  the  Canton  pool,  had 
always  seemed  a  mere  trifle.  I  paid  very  little  atten- 
tion to  it,  except  to  buy  the  stock  outside  the  pool, 
and  make  fifteen  or  twenty  thousand  dollars.  The 
party  that  held  Canton  under  their  control  was  not  a 
strong  one.  There  were  three  rings  in  it  in  1864. 
The  first  ring  was  formed  on  the  basis  of  32-33.  In 
February,  a  new  ring  was  formed  on  the  basis  of  38. 


THE    CANTON    COMBINATION.  295 

This  was  the  ring  in  which  I  had  an  interest.  As  I 
had  only  ten  per  cent,  margin,  i.  e.  five  thousand 
dollars,  I  was  perfectly  willing  to  let  the  brokers, 

0 ;  S ,  G &  Co.,  take  the  entire  control 

of  the  matter.  But  now  that  it  had  risen  to  60,  it 
began  to  look  enticing,  and  I  commenced  to  take  fly- 
ers freely  in  it,  especially  when  one  of  the  daily  pa- 
pers had  stated  that  the  property  of  the  company 
was  marked  down  on  its  books  as  being  worth  par, 
and  the  manipulators  of  the  stocks  asked  me  what  I 
thought  of  150  as  the  future  price.  When  Canton 
reached  66,  a  third  ring  was  formed.  This  was  to  be 
a  sweetener.  The  heavy  capitalists  were  going  into 
it  now,  and  the  price  was  to  be  carried  up  to  par. 
"Would  I  go  into  it,  and  take  a  thousand  shares? 
No  additional  margin  would  be  required.  I  had 
a  large  profit  on  their  books  now."  "  Yes,  I  would." 
This  thousand  shares  of  Canton  would  give  me  di- 
version, something  to  think  about  and  talk  about.  I 
was  member  of  the  new  pool  to  the  extent  of  one 
thousand  shares. 

Canton  is  one  of  the  few  stocks  on  the  list,  which 
has  a  history  of  thirty  years.  It  was  based  upon 
property  in  Baltimore^;  lands,  wharves,  warehouses, 
etc.,  etc.  To  be  sure,  it  was  not  dividend  paying. 
That  circumstance  was  of  little  weight,  however. 
Erie  had  just  paid  a  dividend,  and  why  not  Canton  ? 
The  suggestion  that  it  might  be  used  as  a  government 
navy -yard,  was  a  good  one ;  so  was  the  idea  that  Bal- 
timore was  a  growing  city,  and  that  a  railroad  ran 
through  the  property.  In  1835  this  stock  sold  for 
three  hundred.  This  was  a  pleasing  fact  to  remember. 
F.  B ,  a  wealthy  merchant,  had  loaned  the  ring 


296  INSIDE    LIFE   IN  WALL    STREET. 

a  large  sum,  not  to  be  called  for  in  several  months, 
the  interest  on  which  was  payable  in  gold ;  the  shorts 
were  in  it  heavily.  I  bought  one  thousand  shares  at 
65.  The  price  dropped  back  to  60,  then  rose  to  70. 

E and  I  thought  we  would  go  in  now  and  buy 

five  thousand  shares  of  this  stock.  But  before  doing 
so,  we  took  a  trip  to  Baltimore  for  the  purpose  of  ex- 
amining the  Canton  property,  which  as  we  held  an 
undivided  interest  ot  three-twentieths,  we  thought 
ourselves  justified  in  calling  our  property.  We 
stopped  at  East  Baltimore,  and  after  making  the 
proper  inquiries,  succeeded  in  locating  the  property 

in  question.     E took  his  position  on  a  pile  of 

rubbish,  and  waving  his  hand  to  southward  and  west- 
ward over  a  dreary  waste  of  vacant  lots,  thinly  be- 
sprinkled with  mouldy  looking  brick  and  wooden 
buildings,  delivered  a  brief  oration  as  if  he  were  ad- 
dressing the  entire  executive  committee  of  the  Can- 
ton Company.  He  commenced  by  alluding  to  the 
fact  that  appearances  were  deceitful,  that  this  cele- 
brated property — our  property — had  a  great  future 
before  it;  that  at  some  time,  it  might  be  only  a  few 
years,  and  it  would  certainly  be  within  the  next  cen- 
tury, this  property  was  destined  to  have  value.  He 
pointed  to  the  various  heaps  of  rubbish  in  evidence 
of  the  activity  of  business  thereupon,  alluded  to  the 
memories  of  Canton,  and  closed  by  inviting  the  com- 
mittee to  his  hotel  (a  small  shanty),  in  the  city  of 
Canton,  where  they  might  refresh  themselves  after 
their  arduous  labors,  with  the  wine  of  hops  and  malt, 
otherwise  lager  beer. 

It  need  hardly  be  stated  that  when  we  got  back  to 
New  York  we  sold  our  outside  interest  in  the  Canton 


SOMETHING   NEW.  297 

Company,  and  I  wished  I  had  never  gone  into  the 
last  ring  at  66. 

And  now,  while  in  search  of  "flyers,"  in  which  to 
employ  profitably  my  loose  cash,  and  of  investments 
for  my  $100,000, 1  found  something  which  seemed, 
at  once  a  most  tempting  flyer  and  a  most  perma- 
nent investment. 


CHAPTER 
BUBBLE  COMPANIES. 

Ripples,  Oscillations  and  Tide  Waves  in  Speculation — New  Enterprises 
on  the  Crest  of  the  Wave— Wall  Street  Men  Become  Miners  and 
Mineralogists  —  Mining-patter  and  Wealth  Going  a  Begging  — 
How  They  Blow  the  Bubbles— "A  Limited  Number  of  Shares" 
Offered  to  the  Public— The  Bubble  Full  Blown;  it  Glitters  Like  the 
Rainbow — Ropers-in  Pulling  in  Victims — The  Corpulent  Gentleman 
in  Gold-bowed  Spectacles — What's  in  a  Name? — Very  Much  in  the 
Case  of  a  Mining  Company — We  Go  In  on  the  «•  Hard-pan  "  Basis — 
Chasing  Bubbles  Through  the  Market— We  Catch  Them  Without 
Difficulty — Fighting  for  Subscriptions — "  Gregory  Consoli dated," 
and  "  Gunnell  Gold"  Books  Open — A  General  Bursting. 

LL  former  speculations  in  Wall  Street  had 
been  merely  ripples,  or  at  most,  waves  of 
oscillation  on  the  ocean  of  finance.  This 
was  a  great  tide  wave,  let  us  say  rather  an  "earth- 
quake wave  of  the  tropics,  embracing  in  its  huge 
semicircle,  every  form  of  hazardous  venture.  Its 
crest  was  already  whitening  with  foam,  but  few,  very 
few,  caught  the  low,  dull  roar,  which  was  soon  to 
swell  into  thunder,  as  it  broke  on  the  beach — Ruin. 

"  The  earth  hath  bubbles,  as  the  water  has." 

These  bubbles  are  stock  companies,  formed  on  the 
basis  of  property,  the  value  of  which,  sometimes, 
bears  to  the  nominal  capital  of  the  company,  no  more 
than  the  ratio  of  1  to  1,000.  The  actual  cost  of  the 
property  of  the  Titan  Ledge,  and  Back  Mountain 


WALL   STREET   MINERALOGISTS.  299 

Gold,  Silver  and  Copper  Company,  for  example,  was 
$1,000.  Its  actual  paid  in  capital,  was  $1,000,000. 
The  Grand  Junction  Gold  Mining  Company's  prop- 
erty cost  $40,000.  The  subscribers  to  this  stock, 
had  to  pay  only  $30  per  share,  and  as  there  were 
60,000  shares,  they  paid  $1,800,000  for  their  inter- 
est. This  was  generous  on  the  part  of  the  projectors 
of  the  enterprise.  They  only  made  $1,760,000, 
when  they  might  have  made  $3,000,000. 

The  flood  of  paper  money  poured  from  the  steam 
presses,  working  day  and  night,  sufficed  now  to  float 
all  kinds  of  speculative  enterprises. 

March,  and  the  first  days  of  April,  1864,  were 
palmy  days  for  the  bubble  blowers  of  Wall  Street. 
Having  inflated  railroad-stocks  to  a  profitable  altitude, 
they  proceeded  to  organize  companies  in  all  manner 
of  those  useful,  costly,  and  beautiful  things,  which 
bountiful  mother  earth  pours  out  of  her  lap  in  the 
rough.  Samples  of  these  things  could  be  seen  in 
Wall  Street;  brokers  and  bankers  appeared  to  have 
been  suddenly  smitten  with  a  passion  for  mineralogy. 
Their  offices  were  transformed  into  cabinets  of  miner- 
als, containing  very  fine  specimens  of  sulphuret  of 
lead,  carbonate  of  copper,  and  oxide  of  iron,  besides 
blocks  of  quartz  bespangled  with  virgin  gold,  and 
lumps  of  coal  which  burned  like  a  candle.  Their 
talk  was  in  mining  slang,  and  "pockets,"  "fissure 
veins,"  "faults,"  "spurs,"  "lodes,"  "pyrites,"  "chim- 
neys," ran  all  through  their  vocabulary.  They  had 
a  deal  to  say  about  "  Comstock  Ledge,"  producing  at 
that  time,  $1,000,000  per  month,  not  to  particularize 
respecting  "  Gould  &  Curry,"  "  Ophir,"  "  Yellow  Jacket," 
"Crown  Point,"  and  a  host  of  other  successful  claims. 


300  INSIDE   LIFE   IN   WALL   STREET. 

They  appeared  to  have  transferred  their  speculative 
affections  from  Eock  Island,  Fort  Wayne,  and  the 
railways  generally,  to  "The  Alligator  Bayou  Salt 
Company,"  "The  Big  Mountain  Iron  Company," 
"The  Black  Valley  Coal  Company,"  and  "The 
Angels'  Rest  Quicksilver  Company." 

The  press  teemed  with  advertisements  of  these 
various  enterprises,  and  some  of  the  daily  journals 
devoted  columns  to  the  record  of  what  had  been 
done,  was  doing,  or  was  about  to  be  done,  in  this 
new  field  of  speculation.  There  were  unsuspected 
gulches,  where  the  precious  metals  were  a  drug. 
There  were  mountains  of  silver  and  copper,  where 
junks  could  be  had  as  a  gift.  Gold  ready  to  be  torn 
from  the  loose  embrace  of  the  maternal  quartz.  In 
fine,  far  off  in  the  wilderness,  as  well  as  close  to  the 
fringes  of  civilization,  there  were  hidden  treasures 
without  number,  materials  for  wealth  without  stint, 
ungarnered,  unminted,  unmoulded,  almost  unwatched. 
These  companies  were  organized  in  the  following 
manner : 

Mr.  A ,  a  gentleman  having  some  connection 

with  the  mining  interests  of  the  country,  and  owning 
a  claim  which  had  been  staked  out  on  some  aurifer- 
ous ledge  in  Colorado,  being  naturally  desirous  of 
disposing  of  his  property  to  advantage,  would  go  to 
some  prominent  banker,  for  the  purpose  of  negotia- 
ting a  sale.  But  prominent  bankers  are  not  in  the 
habit  of  paying  cash  for  property  two  thousand  miles 
away.  Accordingly,  this  particular  banker  would  pro- 
pose that  the  claim  be  made  the  basis  of  a  stock  com- 
pany, and  that  the  owner  convey  his  property  in  it 
to  the  company,  and  receive  therefor  a  certain  sum 


BLOWING  THE  BUBBLES.  301 

in  cash,  say  $10,000,  to  be  paid  out  of  the  first  sub- 
scriptions, and  also  a  certain  number  of  shares  of  the 
stock.  The  nominal  capital  of  the  company  to  be, 
say  $2,000,000,  represented  by  forty  thousand  shares 
of  $50  each,  and  the  subscription  price  at  which  it 
was  to  be  offered  to  the  public  to  be  $25  per  share. 
This  proposition  being  acceded  to,  specimens  of  the 
gold  ore  perhaps  in  the  form  of  sulphurets  would 
be  submitted  to  some  well-known  chemist  and  min- 
eralogist, who  subjected  them  to  an  assay,  and  in  due 
time  gave  his  certificate  that  these  specimens  furnish 
by  assay,  $1,000  in  gold  to  the  ton  of  ore.  (The 
amount  of  gold  extracted  by  an  assay  is,  be  it  remem- 
bered, vastly  greater  than  what  is  actually  taken  out 
in  the  practical  working  of  a  mine.)  The  banker 
would  then  approach  some  wealthy  merchant  and 
hold  out  an  inducement  for  him  to  lend  his  name  as 
one  of  the  directors  of  the  company.  This  induce- 
ment might  be  the  gift  of  one  or  two  thousand  shares, 
or  the  subscription  price  might  be  lowered  from  $25 
to  $12.50  in  some  cases,  for  the  merchant,  of  course, 
would  wish  to  "go  in"  on  "hard-pan,"  as  it  is  called, 
i.  e.,  the  lowest  subscription  price.  The  merchant's 
name  having  been  secured,  it  was  an  easy  matter  to 
get  other  names  which  would  add  strength  to  the 
company  in  the  public  estimation,  among  which  gen- 
erally were,  a  well  known  retired  capitalist,  a  heavy 
manufacturer,  and  perhaps  a  philanthropist,  who  de- 
sire to  have  the  riches  of  the  country  developed. 

Thereupon  the  company  would  be  duly  organized 
under  the  general  mining  and  manufacturing  law  of 
the  State  of  New  York.  A  president,  secretary  and 
treasurer  would  be  chosen,  the  last  of  which  offices 


302  INSIDE    LIFE   IN   WALL   STREET. 

would  be  filled  by  the  banker  aforesaid.  A  name 
would  then  be  selected  which  would  be  likely  to 
strike  the  eye  of  the  public.  This  name  might  be 
suggestive  of  what  is  at  once  rich,  barbaric  and  in- 
accessible. Something  lone,  far  off  and  guarded  like 
the  diamond  of  the  desert,  e.  g.,  the  "Arizona  Meta- 
liferous  and  Scalping  Ledge  Gold  and  Silver  Mining 
Company,"  or  the  "Mount  St.  Elias  Silver  Lode  and 
Gold  Vein  Mining  Company."  Perhaps  it  might  sug- 
gest birds,  beasts  or  fishes  of  prey,  e.  g.,  "  The  Vul- 
ture's Nest,  or  the  Wolfs  Peak,  or  the  Pickerel  Lake 
Nugget  and  Virgin  Gold  Pocket  Company."  All  this 
gave  play  to  the  fancy  of  the  future  subscribers. 

Then  came  the  flaming  prospectus,  setting  forth  all 
the  richness,  activity  and  certain  success  of  the  enter- 
prise, got  up  in  the  greatest  splendor  of  typographi- 
cal art,  and  worded  cunningly  with  a  view  to  any 
possible  future  legal  liability  of  the  projectors.  The 
advertisement  in  the  daily  journals,  set  forth  that  the 
subscription  books  were  open  for  a  limited  number  of 
shares  of  the  company  (no  personal  liability  of  the 
stock-holders),  at  the  office  of  the  banker  aforesaid, 
at  the  low  price  of  $25  per  share. 

"  Don't  all  speak  at  once,  gentlemen !  The  shares 
are  going  off  very  rapidly ;  only  one  thousand  are  left, 
but  we  have  reserved  a  few  shares  of  treasury  stock 
for  our  friends,  which  can  be  had  by  immediately  ap- 
plying to  the  office  of ,  the  banker,  as  the  books 

are  to  be  closed  irrevocably  on  the  10th  instant." 

Somehow  there  always  is  a  large  reserve  of  treas- 
ury stock  for  the  friends  of  the  projectors  in  all  these 
cases. 

On  the  first  of  April,  the  whole  market  hummed 


ONE    OF    THE    BUBBLE-BLOWERS.  303 

and  rang  again,  with  the  most  tempting  solicitations 
to  subscribe  and  make  a  fortune.  The  bubbles 
swelled,  and  shone  with  all  the  colors  of  the  rainbow, 
while  each  investor  gazed  upon  them  through-  the 
prism  of  hope  and  fancy,  which  lent  new  glories  to 
the  iridescent,  but,  alas !  unsubstantial  orbs. 

Bubble  companies  have  their  scouts  and  whippers- 
in.  Outside  machinery.  These  gentry  are  on  the 
look-out  for  one  hundred  thousand  dollar  men.  They 
scrutinize  the  bank  accounts  of  operators,  and  track 
their  profits.  They  point  their  detecting  fingers  at  col- 
umns of  figures,  and  then  make  the  acquaintance  of 
the  man  who  piles  up  the  money  represented  by  the 
figures,  to  the  ultimate  end  of  making  themselves 
familiar  even  to  the  handling  of  the  piler's  money. 

The  scout  who  tracked  the  profits  of  the  quartette, 
named  in  our  last  chapter,  was  a  corpulent  gentle- 
man, who  wore  gold-bowed  spectacles.  E tells 

me,  that  ever  since  March,  1864,  he  can  never  see  a 
pair  of  gold-bowed  spectacles,  without  a  sense  of 
goneness  in  the  region  of  his  pantaloon  right  pocket. 
He  was  presented  to  us,  by  his  request,  one  day  just 
after  dinner.  He  saw  us  go  into  Delmonico's,  and 
waited  for  us  to  come  out.  A  kitten  might  play  with 
a  Wall  Street  financier,  after  a  dinner  at  Delmonico's, 
particularly  when  he  had  that  day  bagged  a  profit  of 
$29,000  on  Ohio  and  Mississippi  certificates.  He  in- 
vited us  to  his  office,  which  was  round  the  corner, 
on  the  first  floor.  The  bubble-blower's  office  is  often 
on  the  first  floor,  for  he  knows  that  the  successful 
operator  dislikes  to  exercise  his  gastrocuemius  by 
climbing  stairs. 

In  a  twinkling  we  found  ourselves  in  the  spider's 


304  INSIDE    LIFE  IN  -WALL    STREET. 

parlor.  It  was  a  complete  curiosity-shop.  Models 
of  petroleum  barrels,  made  by  a  new  machine,  which 
took  a  log  of  wood  into  its  jaws,  chewed  it  for 
five  minutes,  and  then  threw  it  out  again,  a  per- 
fect barrel,  statuettes  of  nymphs,  made  out  of  can- 
nel-coal,  small  hydrostatic  presses,  etc.  The  walls 
of  the  parlor  were  papered  with  prospectuses  of 
companies.  The  mantle-piece  and  tables  spread  with 
specimens  of  ore.  Specks  of  gold  winked  out  of 
masses  of  quartz.  Crystals  of  lead,  shone  like  can- 
delabra. Virgin  copper  blushed  by  the  side  of  its 
green-eyed  sister,  the  carbonate  of  the  same  metal. 
On  the  wall,  above  the  chimney-piece,  was  a  section 
of  a  quartz  ledge  in  profile,  which  resembled  a  rocky 
giant,  with  his  face  carved  as  if  into  a  fixed  chuckle, 
over  the  nuggets  buried  in  his  capacious  pockets. 
The  corpulent  gentleman  produced  a  box  of  Partaga 
firsts,  out  of  a  drawer  in  his  desk,  and  furtively  drew 
forth  from  the  recesses  of  a  cupboard,  a  bottle  which 
looked  as  though  it  might  have  been  recently  dusted, 
to  give  it  the  appearance  of  age.  The  sherry  from 
this  bottle,  tasted  of  alum,  burnt  sugar,  and  bitter 
almonds,  but  the  partagas  were  unimpeachable. 

Then  came  business.  Our  host  rattled  away  gaily, 
and  at  length  remarked  (quite  incidentally)  that  he 
never  speculated  in  railway-stocks.  He  thought  that 
he  was  the  true  benefactor  of  the  human  race,  who 
succeeded  in  developing  the  internal  resources  of  his 
country.  Then  he  took  high  patriotic  grounds,  and 
waxed  eloquent.  It  was  the  bounclen  duty  of  every 
capitalist  to  take  a  pecuniary  interest  in  the  great 
work  of  bringing  out  the  riches  of  that  magnificent 
wilderness,  stretching  out  from  where  the  mighty 


PUTTING  ON  THE  COLORS.         307 

father  of  waters  rolled  his  torrent,  to  the  shores  of 
the  Pacific,  etc.  At  the  conclusion  of  his  oration,  he 
exhibited  his  specimens.  First,  lead.  We  looked 
rather  coldly  on  the  fine  crystals  of  this  metal,  as  he 
turned  them  around  and  made  them  sparkle,  for  at 
that  very  moment,  at  least  two  of  us  had,  folded 
up  in  very  small  compass  in  our  pocket-books,  sev- 
eral hundred  shares  of  Buck's  Lead  Company,  which 
the  year  before  we  had  bought  at  the  highest  mar- . 
ket  price,  and  which  was  then  selling  at  one  dollar 
a  share.  He  seemed  quickly  to  discover  the  secret 
of  our  coldness  on  the  subject  of  lead,  and  judi- 
ciously changed  the  subject,  dropping  his  lead,  and 
sounding  us  on  the  subject  of  gold.  His  free  gold 
specimens  were  really  splendid,  but  his  sulphurets 
were  his  pride.  They  had  been  found  to  produce 
from  five  to  twenty  thousand  dollars  to  the  ton,  by 
assay,  and  he  showed  us  certificates  of  eminent  chem- 
ists to  that  effect. 

"Were  these  picked  or  only  average  specimens?" 
"They  were,"  he  replied,  "only  average  specimens, 
the  run  of  the  mine." 

Next,  he  mentioned  the  names  of  leading  public 
men  associated  with  him  in  these  laudable  enter- 
prises, and  showed  us  their  autographs  on  his  books; 
and  having  at  length  exhausted  his  theme,  concluded 
with  a  brief  peroration,  in  which  he  did  not  fail 
delicately  to  hint  at  the  immorality  of  stock-jobbing 
in  Wall  Street,  and  broadly  express  his  conviction 
that  every  capitalist  would  do  well  to  "salt  down"  a 
large  proportion  of  his  profits  derived  from  stock- 
speculation,  into  something  like  a  permanent  invest- 
ment in  these  mining  enterprises,  which  could  not 

19 


3C8  INSIDE    LIFE  IN   WALL    STREET. 

fail  to  pay  him  a  large  return.  He  would  only  add, 
"that  the  demand  for  these  shares  was  very  great, 
and  he  could  not  say  how  long  the  opportunity  would 
be  open  to  subscribe  for  them."  We  had  been  in- 
oculated and  the  virus  worked. 

In  five  days  we  were  striking  a  bargain  with  the 
corpulent  gentleman  in  gold-bowed  spectacles,  on  the 
subscription  price  to  four  different  gold  mining  com- 
panies, viz. :  the  Woolah-Woolah  Gulch  Gold  Min- 
ing and  Stamping  Company.  Capital,  $3,000,000; 
shares  numbering  thirty  thousand;  par  value,  $100; 
subscription  price,  $60  per  share.  The  Gulliver 
Canon  Gold  and  Silver-Lead  Mining  and  "Water 
Sluice  Company.  Capital,  $8,000,000;  shares  num- 
bering one  hundred  and  sixty  thousand;  par  value, 
(we  should  not  forget  the  par  value,)  $50;  sub- 
scription price,  $25  per  share.  The  Federal  Ee- 
public  Gold  Dust  and  Silver  Dirt  Mining  Company. 
Capital,  $2,500,000 ;  shares  numbering  five  hundred 
thousand;  par  value,  $5;  subscription  price,  $3  per 
share.  (This  was  the  biggest  swindle  of  all).  And, 
lastly,  The  Dry  Digging  and  Gold  Washing  Com- 
pany. Capital,  $800,000;  shares  numbering  twenty 
thousand;  par  value,  $40;  subscription  price,  $15 
per  share. 

We  objected  to  these  subscription  prices.  We  de- 
manded to  be  let  in,  if  at  all,  on  the  "  hard-pan  "  price, 
and  at  length  we  thought  we  had  carried  our  point, 
when  twenty  per  cent,  was  knocked  off  from  the  sub- 
scription price,  as  a  special  favor,  wrhich  fact,  of  course, 
we  were  never  to  mention  to  a  living  soul. 

The  mining-bubble  fever  rose  higher  as  March 
rolled  away.  We  began  to  look  for  other  invest- 


WE   CATCH   THE   FEVER.  309 

ments  on  the  "hard:pan"  basis.  It  was  not  difficult 
to  find  them.  Opportunities  presented  themselves 
on  the  first  story ;  and  above  us,  on  the  second  and 
third  stories,  below  us  in  the  basement,  as  well  as  in 
windows  and  hallways.  The  Newspapers  teemed 
with  them.  Little  boys  stood  on  the  corners  and 
handed  elegant  prospectuses  to  the  passers-by.  Min- 
eralogists and  geologists  were  in  clover. 

We  had  commenced  with  gold  and  we  ran  down 
the  scale  according  to  value,  through  silver,  copper, 
lead  and  graduated  into  iron.  Then  we  commenced 
over  again  with  the  rocks,  starting  with  marble,  and 
ending  in  trap  and  sandstone.  After  that  we  got  into 
fluids.  This  move  carried  us  into  petroleum,  of  which, 

more  hereafter.  E.  0 (a  deacon)  introduced  us 

to  iron  and  coal.  The  projector  in  this  enterprise  was 
another  professional  bubble-blower,  who  had  an  office 
not  a  thousand  miles  from  Pine  Street.  He  was  a  tall 
man,  with  a  hang-dog  look,  a  fringe  of  gray  whiskers 
and  a  baritone  voice,  who  delivered  orations  on  the 
importance  of  getting  ready  to  supply  the  South  with 
iron  and  coal,  as  soon  as  the  war  was  over.  We  took 
a  few  hundred  shares  of  the  Fallset  Iron  and  Coal 
Company,  against  the  happening  of  that  much  wished 
for  and  long  expected  event. 

Late  in  March,  the  fever  had  risen  to  its  height. 

One  day  about  this  time,  E and  I  saw  L— — 

issue  from  the  swinging  doors  of  Delmonico,  looking 
very  red  and  smiling.  He  hailed  us  beamingly,  and 
announced  to  us  the  interesting  fact,  that  on  the  mor- 
row the  books  of  the  "  Gregory  Consolidated "  would 

be  opened  at  the  office  of  J.  E &  Co.  He  had 

just  spoken  (he  said)  to  three  capitalists,  who  had 


310  INSIDE  LIFE  IN  WALL  STREET. 

told  him  (in  confidence)  that  here  was  a  great  chance. 
"  Don't  fail  to  be  on  hand  to-morrow,"  said  he,  "there 
is  only  a  limited  number  of  the  shares  to  be  had,  and 
there  will  be  a  great  rush  to  subscribe."  Then  jocu- 
larly bidding  us  to  charge  the  next  morning,  where  we 
saw  his  purple  necktie  wave,  he  disappeared  through 
the  door  of  the  banking  house  of  Morse  &  Co. 

The  next  day,  the  31st  of  March,  was  fine.  The 
golden  sun  threw  its  golden  rays  on  the  curtains  and 

carpets  of  our  eastward-facing  chamber,  as  E 

and  I,  rose  bright  and  early,  and  throwing  open  the 
casement,  like  Parsees,  paid  it  our  adorations,  as  the 
tutelar  genius,  and  fit  symbol  of  Gregory  Consoli- 
dated Gold  Mining  Company ! 

A  crowd  of  expectant  subscribers,  were  hovering 

about  the  office  of  J R &  Co.,  at  an  early  hour. 

Few  of  them  were  recognized  as  regular  operators  in 
the  street.  Most  of  them  were  outsiders  who  had  come 
prepared  to  invest  in  something  that  would  pay.  One 
man,  the  proprietor  of  a  millinery  store,  up  town, 
pulled  off  his  glove,  and  showed  me  four  one  thou- 
sand dollar  bills,  which  he  was  about  to  cash  down, 
in  return  for  one  hundred  shares  of  G.  C.  Co.  An- 
other was  a  clergyman,  from  one  of  the  river  coun- 
ties, who  had  taken  the  early  train  down  to  the 
city  that  morning,  in  order  to  secure  fifty  shares  of 
the  stock.  Lawyers,  doctors,  mechanics,  and  retired 
capitalists  were  also  fully  represented  As  soon  as 

the  books  were  opened,  L who  was  the  tallest, 

and  most  robust  of  the  quartette,  succeeded  in  estab- 
lishing himself  in  the  line  which  extended  from  the 
counter,  where  the  subscription  book  lay,  to  the  street, 
not  however  without  a  brief,  but  severe  struggle  with 


FIGHTING    FOK   BUBBLE-STOCKS.  311 

a  short  resolute-looking  countryman,  who,  after  he 
had  yielded  his  position,  was  heard  stoutly  affirming 
his  right  of  precedence. 

The  capital  stock  of  Gregory  Consolidated  was 
$5,000,000.  Its  shares  numbered  fifty  thousand,  at 
the  par  value  of  $100  each,  and  the  subscription  price 
was  $40  per  share.  In  one  hour  from  the  time  when 
the  books  opened,  the  whole  amount,  $2,000,000,  was 
subscribed ! 

A  few  tardy  individuals  now  made  their  appear- 
ance, eager  to  subscribe,  but  too  late.  They  bid  two 
per  cent,  premium  for  four  thousand  shares,  but  in 
vain;  the  holders  of  the  stock  could  not  be  induced 
to  part  with  their  precious  investment.  L divi- 
ded his  subscription  of  one-thousand  shares  equally 
among  the  quartette.  Then  he  led  the  way  to  the 
office  of  Morse  &  Co.  We  followed  him,  and  here 
another  scene  took  place.  This  time  it  was  in  Gun- 
nell  Gold  Company,  the  subscription  books  of  which 
were  open  at  that  office.  The  subscribers  to  this  stock 
actually  fought  to  get  their  subscriptions  recorded. 
After  a  short  struggle  the  whole  capital  was  subscribed 
for,  and  $100,000  more.  The  subscribers  to  the  over- 
plus begged  and  importuned  the  projectors  of  the 
company  to  surrender  to  them  the  individual  interest 
they  had  reserved  for  themselves.  Their  prayers 
were  answered;  the  projectors  generously  waived 
their  private  interests  and  gave  up  their  reserved 
stock  to  their  petitioners. 

During  the  six  weeks  which  intervened  between 
March  1st  and  April  10th,  1864,  the  nominal  capital 
of  the  joint  stock  companies  presented  to -the  public  in 
Wall  Street,  has  been  estimated  at  $300,000,000,  and 


312  INSIDE    LIFE   IN   WALL    STREET. 

the  amount  of  cash  embarked  in  these  different  en- 
terprises, is  said  to  have  aggregated  over  $60,000,000. 
It  would  be  injustice  to  say  that  all  of  these  were 
bubbles,  and  incorrect  to  say  that  all  of  them  were 
ultimately  failures.  But  the  large  majority  belonged 
to  that  class  of  enterprises  of  which  we  can  only  say 

"  They  rise,  they  shine,  evaporate  and  fall." 

Let  the  history  of  the  Mining  Board  which  was 
subsequently  formed,  tell  the  fate  of  these  companies. 
Let  those  glossy  dividendless  certificates  be  brought 
forth  from  the  unopened  drawers  of  many  a  safe, 
bureau,  and  closet;  then  let  them  be  framed  and 
hanged  over  the  doors  of  investors  as  a  warning 
against  Bubble-companies. 


CHAPTER  XIX. 

PANIC  — FALL  OF  A.   W.   MORSE— CLEARING  AWAY 
THE  WRECK. 

Going  In  for  Just  One  More  Operation — Standing  on  the  Apex  of  a  For- 
tune— The  Bull-leader  in  His  Glory — Helping  the  Unlucky  Ones — 
Daniel  Drew  Selling  Erie— A  Constitutional  Bull — The  Last  Spirt 
in  Stocks — Signs  and  Auguries  of  the  Disaster — Morse  Trying  to 
Sell  Fort  Wayne — Planning  the  Last  Stroke — The  Market  Trembles, 
Totters  and  Falls— Panic  All  Day  and  All  Night— The  Evening  Ex- 
change Pandemonium — "  'Tis  Done  ;  but  Yesterday  a  King,  and 
Now  He  is  a  Nameless  Thing,  so  Abject  yet  Alive  " — Morse  After 
His  Ruin— The  Last  Scene  of  all  that  "  Strange  Eventful  Story  "— 
The  Fortunes  of  The  Quartette— Meeting  a  Prophet  of  Evil— A  Black 
Sunday  and  a  Blue  Monday — Bubble  Company  Stocks  at  a  Discount. 

may  assert  with  confidence,  that,  granting 
these  three  things,  viz. :  that  a  man  has  be- 
come habituated  to  speculation  in  stocks ; 
that  he  has  $100,000  in  the  bank,  and  that  he  daily 
visits  the  stock-market;  then,  and  in  that  case,  he 
will  be  sure  to  make  just  one  more  venture. 

The  experience  of  hundreds  and  thousands  of  op- 
erators, will  attest  the  truth  of  this  proposition. 
Speculation,  at  first  a  sentiment,  or  if  you  please,  a 
taste,  passes  next  into  a  habit,  then  it  grows  into  a 
passion,  a  master  passion,  which  like  Aaron's  serpent, 
swallows  up  and  strengthens  itself  with  other  passions. 
It  becomes  at  last  more  fierce  than  anger,  more  gnaw- 
ing than  jealousy,  more  greedy  than  avarice,  more 


314  INSIDE    LIFE   IN   WALL    STREET. 

absorbing  than  love.  The  stock-market  may  be 
likened  to  a  withered  old  harridan,  enameled,  painted, 
and  decked  in  the  latest  mode,  which  leers  on  the 
speculator,  and  points  to  golden  prizes,  that  like 
the  desert  mirage,  fades  away  and  leaves  him  to  his 
ruin.  The  chronicles  of  speculation  are  little  else 
than  a  list  of  tornadoes  and  wrecks. 

On  the  10th  of  April  I  stood  $160,000  ahead  of 
the  market,  without  counting  the  profits  on  Canton. 
One  hundred  thousand  dollars  of  this  amount  was 
cash  in  bank,  forty  thousand  was  invested  snugly  and 
permanently  in  various  enterprises,  looking  to  the 
"development  of  the  internal  resources  of  the  coun- 
try," and  twenty  thousand  was  in  the  hands  of 
brokers.  Included  in  this  amount,  was  the  five  thou- 
sand dollars  margin  on  five  hundred  shares  of  Canton 
at  38.  This  was  the  apex  of  my  fortunes,  to  which 
I  had  climbed,  with  the  ladder  of  the  five  hundred 
dollars  planted  on  Old  Southern  in  1857. 

"Facilis  descensus  Averni" 

On  the  1st  of  April,  the  bull-leader,  Morse,  was  at 
the  height  of  his  glory.  Every  stock  that  he  touched 
had  turned  into  gold  for  the  fortunate  buyers.  Eock 
Island,  Erie,  Fort  Wayne,  Pittsburg,  Ohio  and  Mis- 
sissippi certificates  responded  in  succession  to  the 
wand  of  the  great  enchanter.  Great  fortunes  had 
dropped  from  his  hands  into  the  pockets  of  his  fol- 
lowers. Not  content  with  making  the  rich  richer, 
he  had  lifted  many  an  unfortunate  out  of  the  slough 
of  Wall  Street  poverty — the  worse  species  of  poverty 
—  into  affluence.  One  of  these  unfortunates  was 

L-  H ,  who  had  lost  everything — money,  credit 

and  friends.  He  went  to  Morse  in  the  form  of  a 


MORSE    HELPS    AX    UNFORTUNATE.  '315 

mendicant,  disclosing  his  forlorn  condition  and  beg- 
ging that  he  would  assist  him.  Morse  took  him  by 
the  hand  and  told  him  to  buy  two  hundred  shares  of 
Fort  Wayne,  and  send  it  in  to  his  (Morse's)  office 

for  his  account.  L.  H ,  instead  of  buying  two 

hundred  shares,  bought  seven  hundred  shares.  Morse 
thought  this  a  little  cheeky,  but  took  charge  of  the 
stock,  and  in  six  weeks,  by  this  and  other  successful 
operations,  under  the  wing  of  his  generous  banker, 

L.  H made  $50,000.  Many  such  deeds  as  this 

marked  the  career  of  the  great  speculator,  and  should 
help  to  cover  his  after  pecuniary  short-comings. 

During  that  brief,  but  brilliant  campaign,  he  had 
fought  the  bears  as  one  would  his  natural  enemies, 
and  now  throughout  the  whole  market,  it  was  in  vain 
to  search  for  any  of  that  tribe.  Yes,  there  was  one — 
an  old  veteran  who  did  not  fear  to  sell  stocks.  It 
could  be  no  other  than  Daniel  Drew.  While  Erie 
was  selling  from  128-130,  every  day  a  nimble  young 
broker  could  have  been  seen  reporting  to  him  the 
price  of  Erie,  whereat  he  would  chuckle  and  give 
orders  to  sell  by  the  thousand  shares.  He  was  con- 
verting his  bonds  into  stock  and  delivering  it  to  fill 
his  contracts.  He  also  obtained  authority  from  the 
Legislature  to  increase  the  capital  stock  of  Erie,  and 
used  ten  thousand  shares  of  the  new  stock  to  load  up 
the  bulls  at  these  inflation  prices. 

Early  in  the  month  last  named,  there  came  a  lull 
in  the  market.  Then  a  sudden  leap  upwards,  and  the 
fire  burned  more  fiercely  than  ever.  It  was  like  a 
tongue  of  flame,  shooting  from  a  palace,  just  before 
it  falls  in  ruins ;  the  funeral  pyre  of  a  thousand  spec- 
ulators. This  spirt  in  the  market,  took  place  at  the 


316  INSIDE    LIFE   IN   WALL    STREET. 

Evening  Exchange.  It  deceived  many,  and  among 
them  the  writer  of  this  narrative.  Three  times  had 
the  market  been  lulled  into  dullness,  and  each  time 
the  lull  had  been  followed  by  a  new  burst  upward. 
Then  came  regrets  that  I  had  ever  sold  out,  and  cal- 
culations of  how  much  I  would  have  made  by  hold- 
ing my  stocks. 

W.  B.  C was  a  bull,  from  the  crown  of  his 

head,  to  the  sole  of  his  foot.  In  all  his  veins  there 
was  never  a  drop  of  ursine  blood.  Consequently,  he 
had  not  yet  sold  his  stocks,  which,  for  a  man  who 
started  six  months  before,  with  only  $6,000,  showed 
him  an  enormous  profit.  "Let  your  profits  run," 
was  his  constant  cry.  For  two  weeks  he  had  fairly 
bristled  with  information,  (commonly  called  "points,") 
respecting  certain  roads,  especially  Reading,  Fort 
Wayne,  and  Galena.  These  stocks  had  hardly  yet 
begun  to  rise.  The  names  of  the  manipulators  were 
a  tower  of  strength.  Money  was  so  easy,  and  the 
bull-element  was  so  powerful.  The  earnings  of  the 
roads,  too,  justified  a  further  rise.  Consolidation, 
Morse,  W.  B.  Ogden,  etc.,— these  were  the  themes 
of  his  taurine  dissertations. 

On  the  morning  after  the  last  upward  leap  of  stocks, 
I  drew  out  sixty  thousand  dollars,  distributed  it 
among  three  different  brokers  and  bought  three  thou- 
sand two  hundred  shares  of  railroad  stocks  of  which 
one  thousand  was  Galena,  at  142 ;  one  thousand  Fort 
Wayne,  at  145 ;  nine  hundred  (full  shares)  Reading, 
at  163,  and  three  hundred  Old  Southern,  at  117. 
Before  night  the  market  sagged  and  my  stocks  could 
not  have  been  sold  without  a  considerable  loss.  I  was 
like  a  wild  thing  caught  in  a  trap,  not  daring  to  break 


SIGNS   AND   PROPHETS    OF   EVIL.  317 

away  with  the  loss  of  a  limb,  and  waiting  in  terror  the 
coming  of  the  cruel  hunter. 

Miserable  days  passed  away  in  agonies  of  doubt. 
There  are  seasons  when  Wall  Street  men  are  agita- 
ted by 

"More  pangs  and  fears  than  wars  or  women  have." 

when  after  fortune  has  smiled  upon  him,  he  suddenly 
sees  her  beginning  to  frown.  He  has  incurred  a 
small  loss  which  he  dares  not  accept,  but  fears  every 
day  a  greater  loss.  If  there  is  then  any  handwriting 
on  the  wall  of  the  speculator's  banqueting  hall,  he  sees 
it,  aye,  and  interprets  it,  perchance ;  and  yet,  though 
"  the  joints  of  his  loins  are  loosed,  and  his  knees  smite 
one  against  another,"  he  keeps  his  seat  and  flies  not 
from  the  enemy  as  terrible  to  him  as  the  Medes  and 
Persians  were  to  the  king  of  Babylon. 

Signs  and  portents  of  coming  disaster  multiplied, 
as  that  weary  week  drew  to  its  close.  Wise  finan- 
cial prophets  like  Jay  Cooke,  had  been  heard  to  pre- 
dict an  approaching  evil.  The  Secretary  of  the 
Treasury  had  been  selling  millions  of  gold,  and  lock- 
ing the  proceeds  in  greenbacks,  in  the  sub-treasury. 
Money  was  palpably  tightening.  Conservative  bank- 
ing-houses, such  as  Lockwood  &  Co.,  refused  any 
longer  to  buy  stocks  on  margins,  or,  except  for  cash; 
but  offered  to  sell  stocks  short  for  their  customers,  on 
ten  per  cent,  margins.  Wild  rumors  were  afloat,  of 
how  Morse  had  gone  down  on  his  knees  to  certain 
bank  cashiers,  and  begged  for  a  million  dollars  on 
Fort  Wayne,  as  collateral,  but  without  avail.  At 
the  Evening  Exchange  on  Friday,  the  15th  of  April, 
he  mounted  the  rostrum  beside  the  president,  while 
one  of  his  lieutenants  stood  beside  him.  In  a  husky 


318  INSIDE    LIFE  IN   WALL    STREET. 

voice,  and  with  a  feeble  smile  upon  his  haggard  face, 
he  offered  to  sell  ten  or  twenty  thousand  shares  of 
Fort  Wayne.  A  shiver  went  through  the  hushed 
crowd,  and  low,  ominous  whispers  were  heard,  "The 
bull  leader  isn't  quite  himself  to-night."  "What's  the 
matter  with  Morse?"  "Is  he  in  liquor?"  But  all 
these  signs  of  disaster  failed  to  open  the  eyes  of  the 
deluded  multitude,  who  still  clung  to  their  treacher- 
ous favorites. 

Speculative  fevers  must  run  their  course,  before 
they  turn  the  sharp  corner  which  leads  into  the  great 
darkness.  Stocks  had  now  reached  this  corner.  Men's 
nerves  are  not  of  steel.  Julius  Caesar  had  his  Brutus, 
Anthony  W.  Morse  had  his  Secretary  Chase.  The 
causes  which  were  to  precipitate  ruin  had  been 
silently  gathering  force.  The  chain  had  been  heated 
and  welded,  and  rove  into  the  huge  block,  which  had 
been  hoisted  and  suspended  aloft.  Its  fall  was  to 
crush  and  pulverize  the  fabric  of  a  thousand  stately 
fortunes,  and  now  the  chain  was  to  be  severed  by  the 
hand  of  panic. 

On  Saturday  the  16th,  and  Sunday  the  17th,  Morse 
took  a  survey  of  the  market.  He  had  six  weeks  be- 
fore, pledged  himself  to  a  crowd  of  capitalists,  who 
ranged  under  his  banner,  to  lead  them  to  victory  and 
wealth.  Now  they  crowded  around  him,  and  begged 
him  to  redeem  his  pledge.  His  resolution  was  soon 
taken.  Like  a  command er-in-chief  hard  pressed  by 
the  enemy,  he  determined  to  abandon  all  his  other 
fortresses,  and  concentrate  his  forces  in  one  strong- 
hold. Early  on  Monday  morning  he  decided  to  sell 
all  the  other  stocks  he  had,  and  then  hold  up  Fort 
Wayne  against  all  odds. 


THE  PANIC  OF  APRIL,  1864.         319 

The  18th  of  April  fell  on  Monday.  The  interval 
of  Holy-day,  had  only  strengthened  the  downward 
tendency.  When  he  entered  the  regular  board  that 
morning,  he  found  nearly  every  broker  eager  to  sell  at 
heavy  concessions,  before  the  call  of  stocks  opened,  and 
the  feeling  in  the  street  was  still  worse.  He  turned 
and  left  the  room.  At  half-past  eleven  o'clock,  a  broker 
rose  in  his  seat,  and  announced  the  failure  of  Morse  & 
Co.  An  appalling  stillness,  like  that  which  precedes 
a  tornado,  followed  the  words,  then  the  storm  burst. 
The  board-room  seemed  suddenly  transformed  into  a 
Cyclopean  work-shop,  where  a  hundred  great  trip- 
hammers were  being  plied.  Pillar  after  pillar  toppled 
over,  till  the  dome  fell.  The  palace  of  enchantment, 
builded  by  a  strong  and  cunning  magician  of  so  many 
golden  hopes,  passed  away  like  a  cloud-pageant. 

A  three  months  mad  revelry  of  speculation,  in 
which  were  concentrated  all  the  emotions,  all  the  in- 
cidents of  a  century  of  sober,  legitimate  traffic — then 
the  dark  dawn  of  another  melancholy  awakening! 

All  day  long  the  panic  raged,  without  pause  or 
hindrance.  The  Evening  Exchange  was  a  Pandemo- 
nium. A  crowd  of  ruined  operators  reeled  and  surged 
up  to  the  rostrum,  half  crazed  by  their  losses,  and 
stupefied  or  maddened  by  drink,  while  the  whole 
room  rang  with  yells  and  curses.  The  space  outside 
the  railing  was  jammed  with  weary  faces,  on  which 
was  written  only  the  word — ruin !  Close  to  the  door 
stood  a  figure  in  widow's  weeds,  wild  eyed  and  shrink-  < 
ing.  She  had  risked  her  last  dollar  on  Fort  Wayne, 
which  was  selling  for  90.  She  stood  there  only  for  a 
moment,  and  then  passed  out  into  the  damp,  chilly 
night  forever. 


320  IXSIDE    LIFE    IN    WALL    STREET. 

Above  all  the  chorus  of  execrations  was  heard  the 
word  "  Morse."  Human  nature  now  showed  its  basest 
side.  No  epithet  too  vile  with  which  to  couple  the 
name  of  the  prostrate  financier.  He  had  fallen  like 
Lucifer  in  one  day,  from  the  zenith  of  his  fame.  The 
men  who,  but  yesterday,  extolled  him  to  the  skies, 
now  vied  with  each  other  in  cursing  him.  His  fail- 
ure was  irreparable.  He  owed  millions  to  his  brother 
brokers,  and  to  depositors,  who  had  trusted  him.  The 
lion  of  the  hour  had  become  a  dead  jackass.  The 
king  of  the  market  was  a  lurking  fugitive.  Men 
calling  themselves  gentlemen,  met  him  in  the  street, 
and  showered  abuse  upon  him.  Shoulder-hitters, 
who  had  lost  some  of  their  ill-gotten  gains  by  his 
fall,  sought  him  out,  and  struck  him  like  a  dog. 

This  was  outrageous.  Let  us  give  Anthony  W. 
Morse  his  due.  He  was  a  great  arithmetician,  a 
shrewd,  far-seeing,  bold  financier.  The  subsequent 
history  of  some  of  the  stocks  in  which  he  dealt  with 
such  recklessness,  has  justified  his  then  apparently 
wild  predictions.  Fort  Wayne,  Rock  Island,  and 
Pittsburg  have  proved  a  mine  of  wealth  to  those  who 
bought  them  in  December,  1864,  and  have  held  them 
to  the  present  day.  He  was  a  free-hearted  generous 
man,  and  would  if  he  could,  have  nullified  the  decrees 
of  fate,  and  made  the  fortunes  of  his  followers.  But 
like  most  great  speculators  he  got  at  last  to  believe 
in  his  star.  Then  he  attempted  impossibilities.  A 
*  longer  and  more  cautious  training  in  the  school  of 
finance,  and  it  might  have  been  different.  But  it  was 
not  so  ordained.  The  example  of  A.  W.  Morse,  only 
serves  as  a  moral  to  close  the  lesson  taught  by  Wall 
Street  speculation. 


THE  LAST  SCENE  IN"  MORSE'S  CAREER.    321 

His  end  speaks  to  all  like  a  warning  voice.  He 
departed  from  the  arena,  a  stripped,  penniless,  heart- 
stricken  man.  Out  of  the  troops  of  wealthy  friends 
which  but  lately  clustered  about  him,  only  one  or  two 
still  clung  to  him.  He  had  now  only  the  shadow  of 
a  great  name.  He  was  pointed  out  in  the  streets  as 
the  man  who  had  once  set  the  market  in  a  blaze,  but 
capitalists  shrunk  from  him  as  if  he  had  the  leprosy. 
His  attenuated  face  now  and  then  flitted  past  the 
streaming  throng  in  Broadway.  One  day,  more  than 
a  year  after  his  failure,  he  was  seen  on  the  street,  and 
Fort  Wayne  rose  five  per  cent.  His  name  still  spread 
alarm  among  the  bears,  and  inspired  the  bulls  with 
new  courage,  like  Ziska's  drum  beaten  at  the  front 
of  the  battallions  of  the  departed  king.  Then  came 
disease  gnawing  at  his  nerves  and  heart-strings.  He 
became  a  changed  man.  No  longer  blithe  and  gay 
of  mien,  but  morose  and  irritable.  The  vast  burden 
of  his  debts  and  losses  wore  upon  him.  He  sought  re- 
lief in  gambling,  his  old  excitement,  but  under  a  new 
form.  A  gentleman  who  had  lost  by  Morse's  failure, 
one  evening  visited,  out  of  curiosity,  a  notorious 
gambling  hell  in  Twenty-fourth  Street.  Sitting  near 
the  dealer  was  one  whom  he  remembered  having  seen 
in  happier  days.  A  gaunt,  pallid  face,  the  features 
sharpened  by  the  fell  disease  under  which  he  was 
suffering,  and  wearing  those  death-like  lines  with 
which  consumption  marks  its  prey.  Alas!  how 
changed  from  that  Morse,  who  but  the  year  before, 
had  led  his  dashing  ranks  to  the  summits  of  the 
market.  A  few  months  more  and  he  lay  upon  his 
death-bed  in  a  second-class  boarding-house,  and  with- 
out means  to  pay  for  the  common  necessities  of  life. 


322  INSIDE  LIFE  IN  WALL  STKEET. 

Even  when  he  died,  his  landlady  held  his  body  for 
the  trifling  debt  which  he  owed  her.  It  was  only 
when  some  friend  stepped  forward  and  paid  the  sum, 
that  the  funeral  rites  could  be  performed  over  all  that 
remained  of  what  was  once  a  king  of  Wall  Street. 

The  feeling  and  condition  of  the  stock-men,  after 
the  panic  of  April  18th,  1864,  had  subsided,  can 
never  be  forgotten  by  the  actors  in  those  scenes. 
Wall  Street  was  like  a  city  of  the  dead,  a  kind  of 
Pompeii  or  Herculaneum,  when  the  volcanic  fires  were 
still  seething,  and  the  lava  still  hardly  cooled,  which 
had  buried,  in  the  course  of  one  brief  sun,  the  high 
raised  hopes,  the  garnered  fortunes,  and  the  financial 
identity  of  thousands.  Men  hardly  dared  inquire 
what  might  be  the  status  of  their  debtors,  for  fear 
they  should  know  too  clearly,  the  certainty  and  irrep- 
arableness  of  their  own  losses. 

In  the  midst  of  this  universal  distrust,  unfounded 
rumors  were  bruited  abroad,  concerning  the  solvency 
of  wealthy  houses.  One  report  said  that  Lockwood 
&  Co.  had  failed.  Another,  that  D.  Groesbeck  &  Co. 
had  succumbed,  but  this  latter  story  was  promptly 
squelched,  by  the  card  of  that  firm,  published  in  the 
daily  journals,  showing  the  snug  amount  of  $1,300,- 
000  to  their  credit  in  bank,  and  offering  to  carry 
stocks  on  a  reasonable  margin,  and  at  six  per  cent, 
interest. 

But  how  stood  the  quartette  after  the  storm? 
During  the  week  preceding  the  panic,  we  were  en- 
gaged in  bolstering  each  other  up,  not  by  money,  for 
we  thought  ourselves  impregnable  in  that  respect, 
but  with  arguments  in  favor  of  another  rise.  We 
knew  we  were  wrong,  but  tried  to  convince  ovrselves 


OMENS    OF   DISASTER.  323 

that  we  were  right.  On  Saturday,  the  pressure  of 
our  internal  convictions  became  too  strong  to  with- 
stand. We  decided  to  unload.  And  now  we  made 
the  same  mistake,  made  by  so  many  others.  We 
limited  our  brokers  in  the  price  at  which  they  were 
to  sell.  I  succeeded  in  getting  rid  of  three  hundred 
shares  of  Old  Southern,  at  a  loss  of  $2,800.  The 
afternoon  found  me  with  two  thousand  nine  hundred 
shares  still  on  hand,  on  which  there  was  by  this  time 
a  heavy  loss,  of  which  I  was  reminded,  in  a  disagree- 
able way,  by  a  call  from  various  brokers,  for  more 

margin.    L thought  there  was  a  "  better  feeling," 

towards  night.     E said  that  he  had  resolved  to 

hold  his  stocks  through  everything,  and  W.  B.  C 

said  there  would  be  a  reaction  next  week,  and 
hummed  "  rally  round  the  flag  boys,  rally  round  the 
flag;"  but  this  patriotic  paean  sounded  like  a  dirge, 
as  he  hummed  it. 

We  started  to  go  home  early  in  the  afternoon.     At 
the  corner  of  William  Street  and  Exchange  Place,  we 

met  S .     He  was  once  a  man  of  wealth,  but  he  had 

left  it  all  in  that  same  unfathomable  abyss  on  the 
brink  of  which  we  were  just  then  standing.  He  was 
a  harmless  but  very  disagreeable  lunatic,  a  Cassandra, 
who  predicted  nothing  but  evil.  A  horrible  man  to 
look  upon.  The  skin  on  his  face  was  like  yellow 
wrinkled  parchment,  his  mouth  a  chasm,  his  eyes 
a  glassy  blue,  over  all  of  which  a  ghastly  smile 
constantly  played.  He  had  for  six  weeks  been 
uttering  his  doleful  prophecies.  When  he  caught 
sight  of  us,  he  began  to  throw  up  his  hands  and  give 
vent  to  hollow  laughs,  which  grated  very  disagreeably 
on  our  keved-up  nerves.  "  I  told  you  so !  I  told  you 
20 


324  INSIDE    LIFE  IN   WALL    STKEET. 

so  !  Ha,  ha,  ha !"  We  tried  to  shake  him  off,  but  he 
stuck  to  us  like  a  leech,  hovered  about  us  like  an 
owl,  and  chuckled  when  he  had  wrenched  out  of 
us  the  reluctant  acknowledgment  that  we  had  not 
yet  sold  our  stocks.  This  conversation  was  unpleas- 
ant to  men  who  had  lost  altogether  during  the  past 
four  days,  one  hundred  thousand  dollars.  At  last  he 
left  us,  shaking  his  skinny  fingers  in  our  faces,  and 
telling  us  to  "  look  sharp  at  stocks  on  Monday,  and 

see  how  we  came  out."     S was  only  one  of  the 

prophets  of  evil  who  seemed  to  dog  our  steps  during 
the  next  thirty-six  hours.  We  met  them  at  the  Even- 
ing Exchange,  in  the  Fifth  Avenue  Reading  Room, 

on  the  street,  everywhere.     Just  as  E-- and  I  were 

doffing  our  unmentionables  preparatory  to  seeking 
our  couches  in  that  room,  which  three  weeks  before 
had  been  illuminated  by  the  sun  of  "  Gregory  Con- 
solidated/' but  which  now  was  barely  lighted  from 
the  single  gas  jet,  which  burned  blue  on  that  moist 

spring    evening,  L made    his   appearance   and 

said  he  had  just  heard  P ,  a  wealthy  operator  offer 

a  heavy  bet  that  Morse  would  break  before  the  next 
week  was  past. 

The  Sunday's  rest  and  quiet  weighed  upon  us  like 
an  incubus.  On  Monday,  we  screwed  our  courage  to 
the  sticking  point,  and  gave  the  order  to  sell  every 
thing  at  the  market  price.  But  this  order  was  not 
given  till  after  the  failure  of  Morse  had  been  an- 
nounced. The  quartette  stood  by  the  door  of  the 

Regular  Board  for  one  hour.    E was  looking  pale, 

L scowling;  W.  B.  C strove  to  look  cheerful, 

and  failed. 

In  three  hours  we  knew  the  very  worst.     Out  of 


THE  REMAINS  OF  THE  WKECK.        325 

$120,000  cash  in  hand  the  week  before,  only  about 
$20,000  was  left  to  me.  The  Canton  profits  and 
margin  were  swept  away,  and  I  held  only  my  mining 
stocks  as  the  memento  of  my  forty  thousand  loose 
cash.  These  stocks  were  neither  saleable  nor  nego- 
tiable, of  which  fact  I  was  disagreeably  reminded 
by  the  sardonic  smile  of  my  bank  cashier,  when  I 
applied  to  him  the  day  after  the  panic,  for  a  small 
loan  of  $1,000  on  what  had  cost  me  $40,000. 


CHAPTER  XX. 

MARGINS,   POOLS,   CORNERS,   POINTS,   AND    OF    HOW 
BROKERS  MAKE  THEIR  MONEY. 

Philosophy  of  Rises  and  Panics  in  Wall  Street — Margins  Before  and 
Since  1862— Effect  of  Doing  Business  on  Margins — Different  Kinds 
of  Pools — Percentages  Paid  by  Bears  for  the  Privilege  of  Selling 
Stocks — Do  Pools  Pay? — Instances  of  Unsuccessful  or  Successful 
Pools — Why  They  are  Generally  Unsuccessful — Trying  to  Unload 
Upon  the  Shoulders  of  the  Outsiders— Points!  What  are  They?— 
Engineering  a  Short  Interest — How  Brokers  Make  Money  in  Pools 
—The  Time  to  Buy,  and  the  Time  to  Sell  Stocks— They  Sell  or  Buy 
in  the  Stocks  of  their  Customers — The  Percentage  Paid  for  Carry- 
ing and  Turning  Stocks — Jolly  Old  Boys  Keeping  Their  Dimes  Busy. 

iHE  first  thing  a  man  does  after  he  has  recov- 
ered from  the  shock  of  a  great  and  mysterious 
disaster,  is  to  philosophize  about  the  causes 
of  that  disaster  in  particular,  and  other  disasters  of 
a  similar  nature. 

When  do  great  rises  and  great  panics  in  stocks  take 
place?  Rises  take  place  when  the  majority  of  op- 
erators desire  to  buy  and  buy.  Panics,  when  the 
majority  of  operators  desire  to  sell  and  sell.  By  the 
terra  majority  I  mean  the  greater  number  of  persons, 
and  the  larger  amount  of  money. 

This  brings  us  to  the  matter  of  margins,  a  word 
which  we  have  already  defined.  This  word  margins 
contains  the  essence  of  stock-speculation.  Great  for- 
tunes are  made  and  lost  by  speculating  on  margins. 


BEAUTIES    OF    THE    MARGIN    SYSTEM.  327 

It  is  the  facility  with  which  large  amount  of  stocks 
can  be  bought  with  a  small  amount  of  money-mar- 
gin, that  stimulates  great  rises,  and  it  is  the  facility 
with  which  those  same  money-margins  are  wiped  out 
when  stocks  fall,  that  creates  the  fear  which  precip- 
itates a  panic. 

As  already  described,  the  amount  of  the  margin 
depends  on  circumstances.  Before  the  late  war, 
stocks  could  be  bought  generally  on  five  per  cent,  of 
the  par  value  of  the  stock ;  e.  g.,  a  hundred  shares  of 
New  York  Central  of  the  par  value  of  $10,000  (mar- 
ket value  70)  called  for  five  hundred  dollars  margin. 

But  the  heavy  fluctuations  in  prices  produced  by 
the  greenback  inflation  which  commenced  in  1862, 
rendered  larger  margins  necessary  to  guard  the  bro- 
ker against  loss.  Ten  per  cent.,  and  by  conservative 
brokerage  houses,  twenty  per  cent,  was  then  gen- 
erally exacted  from  their  customers.  But  many  of 
the  new  tribe  of  brokers  who  did  business  on  the 
curb-stone  or  in  the  Public  Board,  were  still  willing 
to  buy  stocks  on  five  and  even  three  per  cent,  margin, 
protecting  themselves  against  loss  by  continually 
watching  the  market  and  selling  their  customers' 
stocks  on  the  least  alarm. 

It  will  be  readily  seen  that  as  the  fear  of  loss  is 
stronger  when  a  man  has  bought  stocks  on  a  small 
margin,  he  will  be  more  likely  to  sell  frequently 
and  change  his.  position  continually,  very  much,  of 
course,  to  the  advantage  of  his  broker.  One  broker- 
age firm,  doing  business  on  small  margins,  has  de- 
rived an  immense  income  in  commissions  from  their 
customers  in  this  way.  When  everything  is  bright 
nnd  stocks  are  advancing,  brokers  are  often  very  lib- 


328  INSIDE    LIFE  IN   WALL    STREET. 

eral  in  allowing  their  customers  to  buy,  but  when  a 
panic  comes,  accompanied  by  a  scarcity  of  money, 
they  will  refuse  to  carry  stocks  on  any  amount  of 
margin.  Their  customer  must  then  either  pay  for 
his  stocks  in  cash,  or  sell  them.  The  latter  is  gener- 
ally the  only  practicable  course  The  stocks  are  ac- 
cordingly slaughtered,  i.  e.,  sold  out  at  low  figures 
with  loss,  and  even  ruin  to  the  customer.  This  was 
the  case  in  the  panic  of  April,  1864.  Man,  every- 
where a  gregarious  animal,  is  never  more  so  than 
when  in  Wall  Street.  A  flock  of  sheep  following  the 
bell  wether  trotting  up  hill, — this  is  a  picture  of  the 
stock  market,  during  a  rise.  Now  supposing  that 
same  flock  sees,  on  the  top  of  the  hill,  a  scare-crow; 
it  wheels  about  and  rushes  down  hill  twice  as  fast  as  it 
goes  up.  Lambkins  are  trampled  under  the  feet  of 
their  maternal  ewes,  and  the  bell  wether  tumbles 
head  over  heels.  When  the  flock  reaches  the  bottom 
of  the  hill,  it  turns  about  and  stares  with  innocent 
wonder,  at  the  scare-crow  on  the  top  of  the  hill.  This 
is  a  picture  of  the  stock-market  in  a  panic.  Every- 
body seems  crazy  to  sell.  The  customers  dog  their  bro- 
ker's footsteps,  begging  them,  as  a  personal  favor,  to 
sell  their  stocks  at  any  price,  only  to  sell  immediately. 
The  brokers  are  apparently  as  eager  to  sell  as  their 
customers.  Capitalists  who  might  keep  their  stock, 
catch  the  infection  and  sell.  To  crown  all,  the  bears 
emerge  from  their  dens,  swell  the  panic-chorus,  and 
sell  everything  in  expectation  of  lining  their  pockets 
by  the  decline. 

Such  are  'some  of  the  beauties  of  the  margin  sys- 
tem. In  fact  a  margin  may  be  called  a  device  con- 
trived to  create  rises  and  panics,  and  to  keep  the 


DIFFERENT   KINDS    OF   POOLS.  329 

market  in  a  ferment,  so  that  brokers  may  make,  and 
their  customers  lose,  money. 

As  for  pools,  cliques  and  rings ;  terms  which  are 
used  synonymously  in  these  pages,  these  combinations 
are  traps  in  more  senses  than  one,  for  they  not  only 
serve  to  ensnare  the  bears  by  cornering  them,  but 
generally  to  result  in  loss  to  the  members  of  the 
combinations  themselves. 

Pools  are  of  different  kinds. 

First,  there  is  the  secret  pool,  the  operations  where- 
of are  carried  on  in  darkness,  until  some  fine  day  the 
bears  find  themselves  unexpectedly  in  a  tight  place. 

Second,  the  open  and  above-board  pool,  into  which 
the  bears  walk,  because  the  very  frankness  with  which 
the  combination  talk  of  their  plan,  leads  the  bears  to 
suppose  that  there  is  nothing  in  it,  for  who  would 
suspect  a  poolist  of  frankness.  This  species  of  combi- 
nation is  of  rare  occurrence. 

Third,  the  moderate  pool,  which  is  satisfied  with 
five  or  ten  per  cent,  advance  in  the  stock  under  ma- 
nipulation. Daniel  Drew  has  often  worked  Erie  on 
this  plan,  taking  in  as  his  associates,  only  one  or  two 
members,  and  holding  only  five,  ten  or  twenty  thou- 
sand shares  of  the  floating  stock  in  some  favorable 
conjuncture  of  the  market. 

Fourth,  the  grasping  and  voracious  pool,  which 
aims  at  the  entire  control  of  a  certain  stock  and  the 
extermination  of  outside  sellers. 

Fifth,  the  vindictive  pool,  which  aims  to  punish  its 
opposers.  Vanderbilt  and  Drew  have  both  tried  their 
hands  at  this  game. 

Pools  may  be  also  classified  into  two  other  forms. 

First,  those  having  for  their  object  the  raising  of 


330  IXSIDE    LIFE  IN   WALL    STREET. 

stocks,  artificially,  irrespective  of  their  intrinsic  values. 
The  more  worthless  the  stock,  the  more  men  will  go 
short  of  it.  This  better  enables  the  combination  to 
manipulate  the  stock,  and  finally  to  compel  the  short 
sellers  to  settle  up  on  the  terms  which  they  may  dic- 
tate, the  Cumberland  pool  of  1866  and  1867,  when 
that  worthless  fancy  was  raised  from  35  to  90  is  an 
example. 

Second,  those  having  for  their  object,  the  control 
of  stocks  possessing  a  high  intrinsic  value.  The  New 
York  Central  pool  of  recent  fame,  is  an  instance  of 
this  second  species. 

By  far  the  larger  portion  of  the  short  sales  now 
made  in  Wall  Street,  are  transacted  by  selling  the 
stock,  and  then  borrowing  it  for  delivery.  Suppose 
B desires  to  go  short  of  Erie,  when  all  the  float- 
ing stock  is  in  the  hands  of  a  pool.  B has  no 

Erie  stock,  remember,  but  sells,  that  is  agrees  to  de- 
liver, one  hundred  Erie  at  30,  to  C .  He  then 

borrows  the  one  hundred  shares  of  the  pool,  and  de- 
livers it  to  C ,  who  pays  for  it  by  a  certified  check 

for  $3,000.  This  certified  check  B passes  over 

to  the  pool,  and  then  owes  it  (the  pool)  one  hundred 
shares  of  Erie,  which  is  payable  on  demand.  On  re- 
turning them  one  hundred  shares  of  Erie,  the  pool 

pays  B his  $3,000.  If  the  stock  should  go  up 

to  40,  B in  that  case,  if  called  upon  for  the  stock, 

is  obliged  to  go  into  the  market  and  pay  $4,000  for 
his  Erie,  thus  losing  $1,000  by  ,the  operation,  which 
sum  is  presumed  to  go  into  the  pockets  of  the  com- 
bination. In  some  cases,  when  the  pool  has  control 
of  all,  or  nearly  all  the  floating  stock,  they  compel 
B to  pay  them  a  fixed  sum,  instead  of  calling 


POOL    TACTICS.  331 

upon  him  to  return  the  stock.  When  a  pool  holds 
most  of  the  floating  stock  of  a  railroad  or  other 
company,  they  are  in  a  position  to  play  the  lock-up 
game,  in  other  words  to  make  the  corner.  They  call 
upon  the  bears  to  whom  they  have  loaned  stock,  to 
return  it,  and  if  they  fail  to  do  so,  they  buy  them  in 
under  the  rule  as  already  described,  or  allow  them 
to  keep  their  contracts  open  by  paying  a  fixed  sum 
daily,  for  that  privilege.  As  high  as  one  per  cent,  per 
day,  i.  e.,  one  hundred  dollars  for  each  hundred  shares 
of  the  stock  due,  has  been  sometimes  exacted.  The 
bear,  it  will  be  remembered,  gets  interest  generally 
on  his  contract,  but  in  this  case,  he  is  paying  interest 
at  the  ruinous  rate  of  over  three  hundred  per  cent, 
per  annum,  and  may  be  in  addition  finally  compelled 
to  buy  in  his  stock  at  a  heavy  loss. 

The  difference  in  price  between  cash  stock  which 
is  deliverable  and  payable  the  same  day  it  is  bought, 
and  regular  stock  which  is  deliverable  and  payable 
the  next  day,  has  occasionally  run  as  high  as  five  per 
cent.,  and  in  the  case  of  stock  sold,  seller  three,  as 
high  as  ten  per  cent.,  and  of  a  stock  sold,  seller  thirty, 
as  high  as  thirty  per  cent.  Difference  has  been  paid 
between  the  seller's  option  price  and  the  cash  price. 
But  this  occurs  rarely,  except  when  a  general  locking- 
up  of  the  stock  by  a  pool  takes  place,  and  is  invariably 
when  the  pool  is  trying  to  unload,  or  to  compel  the 
bears  to  cover. 

How  many  of  these  combinations  make  money  out 
of  their  operations?  Very  few.  A  large  number 
actually  lose  money.  A  bare  list  of  those  which  have 
proved  disastrous  to  their  projectors,  would  fill  the 
rest  of  this  chapter.  Among  them,  we  may  note  the 


332  INSIDE   LIFE    IN   WALL   STREET. 

Morris  Canal  and  Banking  Pool,  of  some  thirty  years 
since.  In  this  case,  the  bears  refused  to  settle  their 
contracts,  and  the  matter  was  left  to  the  arbitration 
of  the  Board  of  Brokers,  who  decided  that  it  was  a 
conspiracy,  and  accordingly  released  the  bears  from 
their  contracts.  In  the  Norwich  and  Worcester  Pool, 
Jacob  Little  lost  $1,000,000,  as  related  in  our  fourth 
chapter. 

Within  the  past  ten  years,  the  successful  pools 
may  be  almost  numbered  on  one's  fingers,  while  the 
names  of  those  unsuccessful,  are  legion.  The  Hudson 
combination,  which  carried  that  stock  to  180,  in  the 
summer  of  1863,  is  said  to  have  divided  12  per  cent, 
among  its  members. 

Of  all  the  pools  formed  during  the  great  rise  of 
1864,  there  was  scarcely  one,  if  any,  that  did  not 
finally  end  in  heavy  loss  to  its  members.  The  Morse 
Rock  Island  pool  of  December,  1863,  and  January, 
1864,  is  said  to  have  netted  a  profit  of  only  4£ 
per  cent.  But  all  the  members  of  this  combination, 
we  believe,  without  exception,  allowed  their  profits 
to  remain  in  the  hands  of  the  bull-leader,  until  the 
panic  of  April  following,  swept  them  away.  The 
great  Pacific  Mail  pool,  already  mentioned,  and  more 
fully  to  be  described  hereafter,  could  however,  hardly 
have  failed  to  show  a  handsome  profit  to  each  of 
its  members.  The  Vanderbilt  pools  have  been  thor- 
oughly successful,  because  they  have  continued  to 
hold  and  control  the  stocks  of  the  Harlem,  Hudson, 
and  New  York  Central.  But,  the  pool  in  Erie  which 
lasted  a  year  from  April,  1865,  to  the  same  month  in 
1866,  under  the  direction  of  Daniel  Drew,  is  said  to 
have  netted  a  heavy  loss  to  all  its  members  except  the 


NO   MONET   MADE   IN   POOLS.  333 

old  man  and  one  or  two  of  his  friends.  The  same  is 
true  of  the  Erie  pool,  which  lasted  five  or  six  months, 
during  the  summer  and  fall  of  1866,  and  these  are 
only  a  few  out  of  a  hundred  similar  cases. 

The  general  result  of  these  combinations,  is  to  in- 
flict great  damage,  first  on  the  bears,  who  lose  their 
money  by  selling  the  pool  stocks  short,  and  finally,  on 
the  bulls  who  have  inflated  the  prices.  The  bears 
might  appropriately  say,  under  such  circumstances, 
in  the  language  of  the  great  dramatist,  slightly  al- 
tered :  "  He  that  robs  us  (by  a  cornering  operation,) 
doth  not  enrich  himself,  but  makes  us  poor,  indeed." 

It  will  not  be  difficult  to  explain  why  it  is  that  pools 
are  so  generally  unsuccessful.  They  are  treading  on 
dangerous  ground  always.  Even  the  deer  will  turn 
and  stand  at  bay  when  hard  pressed  by  the  hunter, 
and  how  much  more  the  veteran,  resolute  bear  in 
Wall  Street.  Sometimes  a  powerful  combination  will 
be  formed  by  those  who  are  short  of  the  market,  to 
lock  up  money  and  thus  break  down  their  rivals  by 
compelling  them  to  sell  out  their  stocks.  Sometimes 
the  directors  of  a  railroad,  the  stock  of  which  is  un- 
der manipulation,  will  secretly  issue  a  large  amount 
of  fresh  stock,  sell  it  to  the  pool  at  high  prices,  and 
then  proclaim  the  fact  of  the  new  issue.  This  is 
sure  to  produce  a  panic  in  the  stock  and  the  pool  is 
broken  up.  These  tactics  were  resorted  to,  not  only 
in  the  Old  Southern  A.  G.  Jerome  pool,  but  in  the 
more  recent  cases  of  Erie  and  Rock  Island. 

One  of  the  greatest  obstacles  to  the  success  of  a 
pool,  is  the  treachery  of  its  members  who,  knowing 
when  the  summit  price  is  reached,  sell  out  their  in- 
terest and  perhaps  go  short  of  the  stock  besides.  In 


334  INSIDE    LIFE   IN   WALL    STREET. 

this  way,  the  pool  find  themselves  saddled  with  a 
large  amount  of  stock  at  high  prices,  since  they  are 
obliged  to  buy  all  the  stock  offered  in  the  market,  in 
order  to  keep  up  the  price.  Thereupon,  after  shoul- 
dering the  weary  weight  for  a  season,  they  are  forced 
at  last  to  let  it  drop  amid  a  hail-storm  of  anathemas 
from  the  poolists  against  their  treacherous  associates. 
Again,  supposing  a  pool  has  raised  the  price « of  the 
stock  thirty  per  cent,  above  its  original  value,  it  does 
not  follow  from  that  circumstance  that  a  profit  of 
thirty  per  cent,  will  accrue.  The  cost  of  the  stock 
bought  at  different  prices,  may  average  within  ten 
per  cent,  of  the  inflated  price,  and  after  the  short 
contracts  have  all  been  closed,  the  pool  may  find 
itself  unable  to  sell  at  even  an  average  of  twenty 
per  cent,  below  the  ruling  price. 

All  sorts  of  inventions  are  resorted  to  in  that  case. 
Sometimes  a  new  pool  is  organized  on  the  basis  of 
the  then  market  price,  golden  hopes  are  held  out  of 
putting  the  stock  very  much  higher ;  new  members 
are  brought  in  and  urged  to  take  a  large  interest,  so 
that  the  old  members  may  slip  out.  If  this  plan  is 
not  feasible,  various  influences  are  brought  to  bear 
on  the  outside  buyers,  to  induce  them  to  come  in  and 
take  the  load. ,  In  some  cases,  the  stock  is  allowed  to 
drop  heavily,  and  a  new  crop  of  bear  contracts  are 
garnered  up ;  then  the  price  is  run  up  again,  and  the 
bears  cover  their  contracts  at  a  loss  to  themselves  and 
at  a  profit  to  the  ring.  This  process  is  repeated  sev- 
eral times,  the  price  going  lower  at  each  successive 
drop,  until  the  ring,  or  pool,  can  show  a  net  profit, 
or  what  is  more  probable,  a  net  loss,  on  all  their 
operations. 


EXCHANGING   "POINTS."  335 

Pools  and  points,  the  two  P's  of  Wall  Street,  are 
inseparably  connected.  A  "point,"  as  the  reader  is 
doubtless  well  aware,  is  a  piece  of  information  fur- 
nished by  one  operator  to  another,  respecting  the 
upward  or  downward  course  of  a  stock.  The  opera- 
tor who  gives  the  point,  is  presumed  to  know  what  he 
is  talking  about.  He  may  have  intimate  relations 
with  the  director  of  some  railroad  company,  the  stock 
of  which  is  actively  dealt  in,  or  he  may  himself  be  a 
director.  Perhaps  he  is  known  to  do  his  business  in 
the  office  of  a  prominent  brokerage-house,  where 
pools  are  organized,  or,  which  is  more  probable,  he 
may  be  a  member  of  a  pool. 

No  one  who  has  speculated  in  stocks,  will  have 
failed  to  notice  how  eagerly  information  is  sought  for, 
by  parties  interested  in  stocks.  When  a  man  is 
writhing  under  the  sense  of  expected  loss,  or  wildly 
eager  to  grasp  a  profit,  his  mind  is  like  a  photo- 
grapher's negative  plate,  ready  to  receive  the  subtlest 
impressions.  The  first  question  which  an  operator 
asks  his  fellow,  on  meeting  him  in  the  morning,  or  in 
fact  at  any  time  during  the  day,  is,  "What  do  you 
think  ?  "  If  he  is  a  German,  he  says, "  Vot  you  dinks  ? " 
If  a  Frenchman,  "  Vich  is  dat  of  vich  you  teenks  ?  " 
He  wishes  to  get  an  opinion  respecting  stocks,  and 
this  question  often  leads  him  to  "points."  These 
points  are  often  given  as  merely  rumors  floating  in 
the  market,  which  the  informant  does  not  vouch  for ; 
he  merely  gives  them  as  he  has  heard  them.  Some- 
times, they  are  breathed  into  the  ear  of  the  operator, 
as  facts  not  generally  known,  but  which  are  now 
communicated  to  him  alone,  under  the  pledge  of  the 
strictest  secrecy.  The  susceptible  mind  of  the  re- 


336  INSIDE    LIFE    IN   WALL    STREET. 

cipient  of  the  rumors  or  facts,  promptly  makes  its 
decision,  and  then  acts  on  it,  buying  or  selling, 
as  the  case  may  be.  Thereafter  he  imparts  the 
"point"  to  his  nearest  friend,  who  does  not  fail  to 
spread  the  information  for  the  benefit  of  his  nearest 
friend. 

In  this  manner,  pools  are  enabled  to  engineer  a 
short  interest  in  a  stock,  and  when  they  are  ready  to 
unload,  they  also  make  free  use  of  points,  in  order  to 
get  the  public  to  take  their  stock  off  from  their 
hands. 

Short  sales  are  indispensable  to  a  pool.  A  large 
part  of  the  stock  which  they  buy,  is  not  actual  stock, 
but  contracts  for  the  future  delivery  of  stock,  i.  e., 
short  sales.  These  short  sales  benefit  them  in  several 
ways,  especially  by  enabling  them  to  carry  the  stock 
by  lending  it  to  the  short  sellers.  When  a  stock  is 
heavily  oversold  at  a  low  price,  it  is  almost  certain  to 
go  up,  just  as  when  the  majority  of  operators  are  long 
of  stocks  at  a  high  price  it  is  as  certain  to  fall. 

Various  methods  are  adopted  to  entice  operators  to 
sell  short  the  stock  which  a  pool  have  under  their 
manipulation.  Sometimes  the  price  is  made  to  simu- 
late a  weakness  which  deceives  the  street  by  produc- 
ing the  false  impression  that  the  price  will  soon  be 
lower.  This  is  the  partridge  trick.  That  game  bird,  it 
will  be  remembered,  flutters  as  if  wounded,  in  order 
to  draw  the  hunter  away  from  her  young.  As  soon 
as  the  price  of  a  stock  looks  "  weak,"  it  becomes  the 
mark  for  short  sales.  The  bears  rush  in  and  sell  it 
under  the  expectation  of  a  further  decline.  After  a 
sufficient  number  of  the  contracts  of  these  gentlemen 
have  been  taken  by  the  pool,  the  priqe  is  lifted  again, 


BETRAYING    FRIENDS.  337 

and  the  short  sellers  find  themselves  in  the  trap. 
This  in  the  slang  of  the  street  is  known  as  the  "  scoop 
game." 

Instances  are  not  unfrequent  where  members  of 
the  pool  are  paid  by  their  leaders  to  solicit  and  pro- 
cure short  sales.  One  quarter  per  cent,  has  been 
occasionally  paid  on  the  short  sales  influenced  and 
procured  in  this  way. 

B ,  a  member  of  the  pool  goes  to  a  friend  or 

acquaintance  and  gives  him  a  "point."  The  pool, 
he  may  say  is  short  of  money,  and  is  paying  heavy 
rates  to  have  their  stock  carried,  or  he  may  simply 
decry  the  market  value  of  the  stock.  If,  on  the  faith 
of  what  he  says,  his  friend  should  sell  one  hundred 
shares,  the  operator  receives  twenty-five  dollars  for 
his  wages.  This  amounts  to  robbery,  for  it  is  nothing 
else  than  hiring  a  man  to  put  his  hand  into  his  friend's 
pocket  and  taking  one,  two  or  three  thousand  dollars 
therefrom,  and  delivering  it  to  the  pool,  since  the 
short  sale  thus  induced,  is  quite  certain  to  be  covered 
at  a  loss. 

We  have  stated  that  scarcely  any  one  ever  makes 
any  money  in  these  stock  pools.  We  should  except 
from  this  statement  the  brokers,  who,  whether  the 
pool  ever  divides  a  profit  or  not,  are  sure  to  receive 
their  profit.  If  they  are  members  of  the  pool,  they 
know  exactly  when  to  slip  out.  If  they  are  merely 
the  manipulators  of  the  stock,  they  know  just  when 
to  buy  and  just  when  to  realize  their  profit  outside  of 
the  combination.  Their  surest  source  of  profit,  how- 
ever, is  from  the  enormous  brokerages  resulting  from 
the  purchases  and  sales  which  they  make  for  the 
pool's  account.  During  the  three,  six  or  nine  months 


338  INSIDE    LIFE   IN   WALL    STREET. 

that  the  operations  of  one  of  these  operators  may 
continue,  the  whole  capital  stock  of  a  railroad  amount- 
ing, perhaps,  to  six  or  eight  millions,  may  be  bought 
and  sold  by  the  brokers  of  the  combination,  four  or 
five  tunes  over,  and  the  brokerage  on  these  trans- 
actions often  amounts  to  more  than  $50,000.  Besides 
this  brokerage,  there  are  multitudes  of  pickings  in 
the  way  of  interest  and  profitable  turns,  which  help 
out  the  sum  total. 

In  general  speculation,  everything  seems  to  work 
for  the  benefit  of  the  broker.  One  of  his  principal 
sources  of  revenue  which  we  have  already  alluded 
to,  is  the  use  he  makes  of  his  customer's  stocks. 

It  is  an  adage  in  the  stock-market,  that  the  outside 
public,  as  it  is  called,  buys  stocks  when  they  are  high, 
and  sells  them  when  they  are  low.  When  a  dull 
season  has  been  succeeded  by  an  active  market,  and 
stocks  have  risen  very  high,  the  entire  speculative 
community  seems  to  have  emptied  itself  into  the 
purlieus  of  the  stock-market.  From  many  a  lonely 
hamlet,  from  many  an  inland  city,  as  well  as  from 
the  brown-stone  fronts,  and  marble  hotels  of  the 
great  metropolis  itself,  they  pour  amain  into  Wall 
Street,  to  buy  high^riced  stocks.  A  few  weeks  be- 
fore, the  same  stocks  at  a  price  twenty  per  cent, 
lower,  failed  to  tempt  them,  but  now,  stocks  have  be- 
come suddenly  valuable.  "Points"  are  communi- 
cated on  every  side,  with  the  greatest  freedom.  The 
prevailing  feeling  says  buy.  The  broker  says  buy. 
The  pools  say  buy,  for  this  rampant  market  is  their 
harvest  time,  in  which  they  shuffle  off  their  loads 
upon  the  shoulders  of  the  new  gangs  of  buyers. 

The  hour  and  the  men  for  the  brokers  have  now  both 


SELLING  CUSTOMERS'  STOCKS.  339 

come.  The  public  give  orders  to  buy  these  high 
priced  stocks.  The  brokers  execute  their  orders,  and 
buy.  But  speedily  a  cracking  sound  is  heard.  The 
market  prices  begin  to  break.  The  broker  quietly 
throws  his  customer's  stocks  on  the  market.  This 
helps  on  the  decline.  The  customer,  in  sad  uncon- 
sciousness that  his  stocks  have  been  sold,  clings  to 
his  supposed  loss.  Then  he  is  called  upon  for  more 
margin,  but  when  stocks  have  fallen  ten  or  fifteen  per 
cent,  from  where  he  has  bought,  they  no  longer  seem 
valuable,  and  at  last  he  gives  the  order  to  sell,  as 
eagerly  as  but  lately  he  gave  the  order  to  buy.  His 
margin  has  been  transferred  to  the  broker's  pocket. 
This  having  been  accomplished,  the  customer  begins  to 
regret  that  instead  of  buying,  he  did  not  sell  short,  and 
thus  profit  by  the  decline.  Whereupon  he  studies  the 
market.  It  has  gone  down,  (reasons  he)  to  be  sure,  but 
not  so  low  as  it  might  go.  It  is  quoted  now  as  "  weak," 
and  "  heavy."  The  "  points  "  now  are  in  favor  of  selling. 
He  sells  short  at  the  low  price,  but  scarcely  has  he  done 
so  when  the  market  suddenly  stiffens,  and  he  finds  that 
he  has  made  another  mistake.  Still  he  clings  to  his 
loss.  The  broker,  on  his  part,  seeing  the  market  ad- 
vancing, promptly  buys  in  the  stock  of  which  his 
customer  is  short,  and  when  the  market  has  risen 
nearly  to  the  limit  of  the  customer's  margin,  he  no- 
tifies him  of  this  fact,  and  asks  what  shall  be  done. 
Ten  chances  to  one  that  the  customer  thereupon  or- 
ders him  to  buy  in  and  cover  the  short  contract,  not 
knowing  that  it  has  been  already  covered  at  a  much 
lower  figure.  Thus  the  broker  makes  another  profit 
out  of  his  customer.  This  process  is  kept  up,  the 
customer  buying  at  high,  and  selling  at  low  prices, 
21 


340  INSIDE    LIFE  IN  WALL   STREET. 

till  his  money  and  patience  alike  are  exhausted,  and 
he  retires  from  the  scene  of  his  labors,  to  renew  his 
strength,  and  after  a  time  returns  refreshed  and  re- 
plenished, to  repeat  the  same  old  moves,  buying  when 
everything  is  selling  at  summit  prices,  and  selling 
when  the  market  is  depressed  and  weak. 

This  use  of  his  customer's  stock  is,  however,  made 
at  the  risk  of  the  broker.  For,  if  the  market  should 
rise  after  the  customer's  stocks  are  sold  by  the  broker, 
as  before  described,  and  thereupon  the  order  is  given 
to  realize,  of  course  the  broker  has  to  pay  the  cus- 
tomer's profit  out  of  his  own  pocket.  But  generally, 
the  broker  protects  himself,  by  being  in  the  market 
constantly,  and  guiding  himself  accordingly. 

Another  way  in  which  the  broker  makes  his  money, 
is  to  sell  out  for  cash,  the  stocks  which  he  holds,  and 
to  buy  them  back,  seller  ten  or  thirty,  at  a  difference 
of  several  per  cent.  Here  again,  he  is  exposed  to 
the  possibility  of  loss.  For  if  the  party  who  sells 
him  the  stock  on  the  seller's  option,  should  be  unable 
to  deliver,  in  consequence  of  a  great  advance  in  the 
price,  he,  the  seller  of  the  cash  stock,  would  suffer 
the  loss.  But  this  contingency  may  be  guarded 
against,  by  calling  on  the  seller  of  the  option  for 
margin,  to  be  deposited  in  some  Trust  Company,  to 
abide  the  event.  This  mode  of  turning  stocks,  may 
be  better  explained  by  the  following  account,  viz : 

A ,  a  broker,  having  one  hundred  shares  of  cash  Erie  stock, 

sells  it  to  be  B ,  another  broker,  at  40 $4,000 

And  buys  of  D one  hundred  shares  Erie,  seller  30,  at  36,      3,600 


A makes  4  per  cent.,  or, $400 

That    is,   if    the    seller's    option    is    delivered    according   to 
contract.     But  supposing  Erie  rise  to  50  and  the  seller's 


THE  CARRIERS  OF  STOCKS  REAP  A  HARVEST.     341 

option  at  36  can  not  be  delivered  on  account  of  the  failure 

of  D ,  the  party  who  contracts  to  deliver  it  upon  his 

option  at  36,  obviously  B loses  the  difference  between 

one  hundred  shares  at  50, $5,000 

And  one  hundred  shares  at  40, 4,000 

B is  out  ...  v $1,000 

But,  as  already  stated,  he  may  protect  himself 
against  this  liability  by  calling  upon  D for  mar- 
gin as  the  stock  rises. 

The  wealthier  members  of  the  brokers'  board  use 
their  money  very  profitably  in  "carrying"  stocks  for 
their  associates,  whose  means  are  more  limited.  The 
rate  at  which  stocks  are  carried,  varies  according  to 
the  condition  of  the  money  market.  When  money 
is  scarce,  or  in  Wall  Street  parlance,  tight,  the  rate 
has  sometimes  been  as  high  as  one  per  cent,  a  day. 
But  this  is  a  very  unusual  interest.  From  one-quarter 
of  one  per  cent,  to  one  per  cent,  a  month,  and  seven 
per  cent,  per  annum  in  addition,  is  the  common  rate 
when  money  is  tight.  This  is  usurious  and  illegal. 
But  the  law  against  taking  more  than  seven  per  cent, 
is  evaded  by  selling  for  cash,  the  stock  to  be  carried, 
and  buying  it  back  regular  at  a  small  difference,  which 
is  paid  by  the  person  who  desires  to  have  his  stock  "car- 
ried." In  times  of  money  stringency,  the  wealthier 
class  of  brokers  derive  a  great  revenue  from  these 
differences,  which  are  paid  them  by  their  brethren, 
whose  waists,  pecuniarily  speaking,  are  more  slender. 

These  "common  carriers"  on  the  Wall  Street  road, 
are,  many  of  them,  capitalists  who  have  retired  from 
the  active  business  of  buying  and  selling,  and  are 
content  to  earn  twenty  or  thirty  per  cent,  on  their 
money  by  carrying  stocks.  Sleek  old  boys,  with  blush- 


342  INSIDE    LIFE  IN  WALL    STREET. 

ing  autumnal  faces,  surrounded  by  snowy  December 
locks  and  beard,  they  keep  their  nimble  sixpences 
always  busy,  and  like  the  ivy-green  which  "  creeps 
o'er  ruins  old,"  they  fatten  and  flourish  in  times  of 
panic,  or  when  the  interest  rate  is  cent  per  cent. 

Douglas  Jerrold  wittily  defined  marriage  as  the  re- 
sult of  an  insane  desire  on  the  part  of  a  young  man 
to  pay  a  young  woman's  board.  Speculation  may  be 
in  like  manner  defined  as  an  insane  desire  on  the 
part  of  a  stock  operator  to  pay  the  board  and  make 
the  fortune  of  a  broker. 


CHAPTER  XXI. 
THE  SECOND  HARLEM  CORNER. 

More  Figuring  on  Balances — Gathering  Up  the  Fragments — A  Flyer 
on  Five  Hundred  Fort  Wayne  for  Cash— What  Can  I  Sell  Short?— 
One  Solitary  Column  Standing  Erect  Among  a  Heap  of  Ruins — The 
Commodore  Holds  up  Harlem  and  Waits  for  His  Revenge — ' '  Sell 
Harlem  at  190,  and  now  You're  Right  " — History  and  Causes  of  the 
Second  Harlem  Rise— The  Plot  to  Break  Harlem— The  Counterplot 
—The  Stock  on  the  Rampage— The  Biters  Bit— The  Greatest  of  All 
.  the  Bears  in  the  Trap— Daniel  Drew  Selling  Calls— A  Lobby-engi- 
neer with  a  Broken  Wing — Bears  Dancing  on  Red-hot  Plates — The 
Commodore  says,  "Put  Up  the  Price  to  One  Thousand" — The 
Coup  de  Grace  to  All  the  Bears — How  I  Came  Out  on  Selling  Har- 
lem Short — A  Cotton  Operation. 

I 

N  the  Arabian  Nights'  Entertainments  there  is 
a  story  of  an  honest  butcher,  who  sold  meat 
to  a  magician,  and  received  his  pay  in  what  he 
thought  was  money,  which  he  carefully  laid  away,  but 
when  he  went  to  count  his  hoard,  he  found  instead  of 
gold  coin,  nothing  but  withered  leaves.  This  tale  ex- 
actly illustrates  the  condition  of  stock-speculators,  after 
the  panic  of  April  18th,  1864.  Instead  of  golden  prof- 
its, they  had  only  a  beggarly  account  of  minus  bal- 
ances. Many  of  them  had  simply  lost  their  all.  Oth- 
ers were  largely  indebted  to  their  brokers.  The  sole 
assets  of  some,  were  debts  due  from  their  brokers,  who 
had  failed  flat.  He  might  be  accounted  fortunate,  who 
had  a  few  thousands  left,  with  which  to  begin  over  again. 
The  quartette  met  by  appointment,  at  the  office 


344  INSIDE    LIFE  IN  WALL    STREET. 

of  L ,  at  eleven  A.  M.,  April  19th.  Four  weary 

leaden-eyed  men,  breathless  and  scathed,  after  a  three 
months'  storm,  ending  in  thunder,  lightning,  and 

wreck.  A  dead*  silence,  and  then  W.  B.  C 

took  out  his  pencil  gloomily,  and  commenced  fig- 
uring on  a  sheet  of  paper.  Poor  fellow!  He  had 
been  hit  hard.  His  two  brokers  had  failed,  and  out 
of  what  was  worth  $78,000  one  short  week  before, 
he  had  only  $500  in  cash  left.  The  rest  of  his  assets 
were  what  his  brokers  owed  him,  (about  $15,000,) 
the  certificates  of  those  confounded  mining  compa- 
nies, and  a  call  for  two  hundred  shares  of  Harlem, 

at  175.  E could  muster  only  $8,000  in  cash, 

and  his  mining  company  certificates.  L ,  out  of 

$190,000,  had  $28,000  in  cash,  and  his  certificates. 

I  turned  my  pockets  inside  out,  and  took  a  new  in- 
ventory of  assets.  Result :  $20,000  cash,  the  bubble 
certificates  of  course,  and  a  small  paper,  three  inches  by 
four,  which  declared  me  entitled  to  call  on  a  well-known 
operator,  for  two  hundred  shares  of  Harlem  at  200, 
any  time  within  sixty  days,  from  the  fifth  day  of  April. 

By  Plutus !  Wait  a  bit !  What  is  this  ?  A  mem- 
orandum of  $175,000  at  par  in  7  3-10  bonds,  with  a 
margin  of  $8,000  and  accumulated  profits  of  at  least 
twice  as  much  more  !  I  had  forgotten  all  about  this 
transaction  during  the  fierce  campaign  just  over. 
The  bonds  had  all  this  time  been  snugly  lying  in  the 
vaults  .of  different  savings  banks,  drawing  interest, 
while  I  was  sleeping  or  trying  to  "work  the  oracle" 
on  'Change.  Then  I  commenced  figuring  in  hot  haste. 

Ten  months  interest  in  gold  on  $175,000,  7  fir,  .  .  .  $10,64580 
Premium  on  gold  at  170—70 7,452  06 

$18,097  86 


A   FRESH   START.  345 

The  interest  charged  by  the  savings  banks  of  5£- 
6  per  cent,  in  currency,  had  been  paid  for  six  months 
in  advance,  in  January.  The  bonds  were  selling,  even 
in  that  panicky  season,  at  109.  This  swelled  my 
profits  $8,000  more,  for  the  bonds  had  only  cost  me 
104-105.  I  had  $46,000  to  start  the  ball  rolling 
once  more.  After  our  figuring  had  been  thus  com- 
pleted, we  held  a  council  of  war,  and  decided  upon 
the  following  policy,  viz :  First,  to  buy  only  as  much 
stock  as  we  could  pay  for.  Second,  to  look  about, 
and  see  if  there  was  any  high-priced  stock,  which  it 
would  answer  to  sell  short,  for  the  late  panic  had 
taught  us  the  bear-lesson,  that  money  could  be  made 
by  selling  stocks  at  a  high  price. 

I  now  leave  L ,  E and  W.  B.  C ,  to 

shift  for  themselves,  for  a  season,  and  give  my  indi- 
vidual experience  while  endeavoring  to  construct  a 
new  edifice  out  of  the  debris  of  my  late  high-piled 
fortunes. 

What  could  be  bought  for  cash  which  would  pay 
best?  On  taking  a  survey,  I  pitched  upon  Fort 
Wayne,  my  old  favorite.  It  had  fallen  from  153  to 
90.  But  after  every  severe  panic  there  is  always  a 
sharp  recovery  of  prices,  or  as  it  called,  "the  reac- 
tion." This  is  often  produced  by  the  fact  that  the 
bears  sell  largely  of  stocks  which  they  do  not  actu- 
ally hold,  and  when  prices  have  reached  the  bottom 
of  the  hill,  they  rush  in  to  cover  their  shorts  by  buy- 
ing. Fort  Wayne  had  already  begun  to  feel  this 
reaction,  and  was  now  selling  for  101.  I  asked  one 
of  my  brokers — the  least  shaky  of  them — if  he  would 
buy  five  hundred  Fort  Wayne,  if  I  would  give  him 
§20,000  in  cash  and  orders  on  three  savings  banks 


346  INSIDE    LIFE   IN   WALL    STKEET. 

for  $175,000,  7  3-10  bonds,  which  he  might  sell  on 
the  first  of  May,  the  margin  and  accumulations  being 
$26,000.  He  hummed  and  hawed,  looked  distrustful 
(for  money  was  five  per  cent,  a  month,  and  the  whole 
street  was  ringing  with  reports  of  failures),  and  finally 
inquired  if  everything  was  right  and  regular  about 
the  bonds. 

"Send  your  boy  up  and  get  the  orders  accepted, 
if  you  are  not  satisfied  with  what  I  tell  you." 

"All  right,  I'll  take  your  word  for  it.  You  must 
excuse  my  suspicions,  but  the  whole  street  just  now 
is  rotten,  you  know." 

The  five  hundred  Fort  Wayne  was  bought  at  102. 
This  purchase  was  made  in  fear  and  trembling.  We 
were  not  yet  out  of  the  jaws  of  the  panic. 

If  we  could  judge  from  the  doleful  looks  of  bank 
cashiers  and  money-lenders,  everything  said  sell! 
The  whole  street  was  in  ruins.  Of  all  the  stately 
columns,  one  only,  still  stood  erect.  It  was  Harlem, 
which  now  loomed  up  like  Pompey's  pillar  under  a 
desert  sky.  It  had  reeled  and  quivered  during  the 
storm,  but  stood  bravely  at  the  height  of  190.  Beside 
this  solitary  column,  like  Marius  among  the  ruins  of 
Carthage,  sat  a  grim  old  man,  brooding  over  his 
wrongs,  and  preparing  to  revenge  them.  Our  Marius 
was  none  other  than  Cornelius  Vanderbilt.  For 
thirty  days  his  masons  had  been  at  work  rearing  the 
column  of  Harlem,  while  the  Commodore  propped 
and  buttressed  it  with  four  millions  of  hard  cash.  It 
was  to  be  the  engine  with  which  he  would  accomplish 
his  revenge.  To  sell  Harlem  short  at  that  time,  would 
seem  in  the  light  of  what  afterwards  happened,  to  be 
little  less  than  madness. 


STRADDLING   THE    MARKET.  347 

But  Harlem,  selling  at  190,  nearly  everybody  said 
was  more  than  one  hundred  per  cent,  higher  than  its 
true  value.  It  was  held  up  by  artificial  means.  It 
would  break  down  heavily  at  sometime,  and  if  a  man 
would  sell  it  for  future  delivery,  and  stay  short  of  it, 
he  would  make  a  great  profit.  So  said  they  who  un- 
derstood not  the  true  significance  of  the  Harlem 
movement.  My  broker  evidently  thought  it  a  great 
piece  of  folly  to  buy  Fort  Wayne  at  par,  as  I  had 
done  an  hour  before,  but  when  I  spoke  of  going  short 
of  Harlem  at  190,  his  face  lighted  up  as  if  he  would 
say  "Now  you're  right." 

The  order  was  given,  "  Sell  two  hundred  Harlem  at 
190-195."  In  three  minutes  a  tall,  slender  individual 
(one  of  the  Commodore's  men)  had  gobbled  my  two 
hundred  shares,  with  an  air  and  look  that  reminded 
us  of  young  Oliver  asking  for  more.  I  was  short  of 
Harlem  at  190,  and  long  of  Fort  Wayne  at  101. 
My  position  was  apparently  in  strict  accordance  with 
that  great  maxim,  sell  stocks  when  they  are  high,  and 
'buy  them  when  they  are  low.  This  maxim  was  veri- 
fied by  the  rapid  upward  movement  in  Fort  Wayne. 
During  the  next  four  days  it  rose  to  129.  Profits  on 
this  operation,  $12,000.  The  maxim,  however,  was 
utterly  falsified  by  the  rise  of  Harlem  during  the 
same  period,  to  230.  When  it  reached  200, 1  sold  two 
hundred  shares  more  at  that  price,  and  gave  my  broker 
orders  to  sell  two  hundred  shares  more,  when  the  price 
reached  210.  It  touched  210  almost  as  soon  as  I  had 
given  the  order.  My  broker  had  just  time  to  sell  two 
hundred  Harlem  at  210,  and  then  up  it  bounded  to  220. 

My  profits  on  Fort  Wayne  were  being  swallowed 
up  in  the  Harlem  shorts.  It  was  a  race  between  a 


348  INSIDE    LIFE  IN  WALL   STREET. 

bull  and  a  bear,  between  buying  stocks  for  a  rise  and 
selling  them  for  a  fall.  I  bought  Canton  at  35,  and 
sold  it  at  40,  with  a  profit  of  $3,000,  but  my  short 
Harlem  eat  up  that  profit,  and  stood  me  still  $1,500 
out  of  pocket.  I  bought  other  stocks  and  made  prof- 
its every  time  on  my  purchases,  but  Harlem  kept  re- 
lentlessly moving  up  and  the  profits  I  made  on  my 
purchases  were  not  sufficient  to  cancel  the  fresh  losses 
which  accrued  from  Harlem  as  it  rose. 

But  before  giving  the  result  of  this  race,  it  may 
not  be  uninteresting  to  the  reader  to  go  back  and 
give  a  brief  history  of  the  Harlem  rise,  with  the  causes 
which  produced  it. 

As  we  remarked  in  a  preceding  chapter,  the  pri- 
mary object  which  Vanderbilt  had  in  view  in  buying 
so  largely  of  Harlem  in  1862  and  1863,  was  the  in- 
vestment of  some  of  his  spare  millions,  in  order  to 
make  him  snug  and  comfortable  in  his  old  age,  for 
already  he  clearly  foresaw  that  Harlem,  under  proper 
management,  would  soon  pay  dividends.  When  he 
found  himself  opposed  and  thwarted  by  his  enemies, 
in  the  courts  of  law,  in  the  Common  Council  and  else- 
where, he  turned  upon  and  twisted  Harlem  up  to  180, 
and  in  this  way  punished  his  enemies,  who  had  sold 
it  short  in  expectation  that  the  measures  they  had 
taken  would  depress  the  stock  to  a  very  low  point. 

After  that  and  in  the  fall  of  1863,  the  price  had 
fallen  back  to  75-90.  The  matter  of  the  franchise 
grant  now  rested  with  the  Legislature,  and  the  new 
campaign  in  Harlem  was  to  be  fought  in  Albany. 
Soon  after  the  opening  of  the  session,  a  bill  was  re- 
ported favorable  to  the  grant.  In  expectation  of  this 
move,  many  members  of  the  Legislature  and  the 


HARLEM   IX    THE    LEGISLATURE.  349 

lobby,  and  their  friends,  as  well  as  the  adherents  and 
coadjutors  of  Yanderbilt,  had  bought  the  stock  freely 
from  90  to  105. 

When  the  favorable  report  was  known  to  the  gen- 
eral public,  they  rushed  in  and  loaded  themselves  up 
with  the  stock,  which  now  rose  rapidly  to  150.  One 
of  Vanderbilt's  confidential  agents  at  Albany,  tele- 
graphed repeatedly  that  the  bill  would  surely  pass. 
The  Commodore  and  his  associates  largely  increased 
their  line  of  stock,  and  as  high  a  figure  as  200  was 
confidently  predicted. 

But  while  everything  promised  well,  and  already  in 
imagination,  the  advocates  of  a  Broadway  railroad, 
saw  that  renowned  thoroughfare  lined  with  street 
cars  under  the  management  of  the  Harlem  board,  a 
sly  game  had  been  playing  at  Albany.  The  members 
of  the  Legislature,  seeing  the  facility  with  which  the 
price  had  been  raised  from  par  to  150,  by  a  favorably 
reported  bill,  rightly  concluded  that  an  adverse  report 
would  depress  the  value  of  the  stock  to  par.  They 
accordingly  sold  to  the  Commodore's  friends,  at  from 
140  to  150,  the  stock  which  had  cost  them  somewhere 
in  the  neighborhood  of  par,  and  then  went  heavily 
short  of  the  stock.  On  the  25th  of  March,  the  con- 
spirators sprung  the  trap  on  the  unsuspecting  old 
sea-faring  man  and  his  mates.  The  price  fell  in  two 
days,  amid  the  greatest  excitement,  to  101. 

The  short  gentlemen  thought  they  had  feathered 
their  nests  nicely,  beside  giving  the  Commodore  a 
bloody  coxcomb  in  return  for  what  he  had  given 
them,  by  twisting  Harlem  to  181  in  the  summer  of 
1863.  They  fluttered  about  the  market  uttering 
loud  clucks  of  exultation. 


350  INSIDE    LIFE   IN   WALL    STKEET. 

One  of  these  individuals  was  Y s,  a  plump  little 

man  with  an  eye  like  a  startled  cock-partridge. 
He  had  affiliations  with  the  lobby  and  also  with  the 
Common  Council,  and  having  been  caught  in  the  first 
Harlem  corner,  be  looked  upon  that  stock  as  some- 
thing which  owed  him  money,  not  to  say  revenge. 
Having  been  so  fortunate  as  to  put  out  shorts  at  140, 
he  might  have  been  seen  on  that  loud  Saturday  when 
Harlem  sold  down  to  101,  hovering  about  the  market, 
beaming  with  smiles  and  hob-nobbing  with  his  numer- 
ous bear  friends.  Of  course  he  did  not  take  his  pro- 
fit (bears  often  seem  very  reluctant  to  do  this)  for  he 
thought  Harlem  would  drop  to  75.  Towards  night 
he  became  less  gushing  in  his  manifestations  of  de- 
light, for  Harlem  had  mysteriously  risen  to  110.  In 
a  few  days  he  subsided  into  that  state  of  financial  in- 
cubation called  "  sitting  on  his  shorts."  When  Har- 
lem had  risen  to  190  he  still  sat  there  as  "  patient  as 
the  mourning  dove."  A  week  after  he  suddenly  took 
flight  with  a  brokers  billet  under  his  wing,  showing 
him  stripped  of  plumage  and  financial  eggs  broken 
to  the  amount  of  $40,000. 

But  let  us  return  to  the  thread  of  our  narrative. 
How  happened  it  that  the  Harlem  Broadway  Franchise 
Bill  was  killed,  when,  as  the  Commodore  supposed,  a 
majority  of  both  houses  were  pledged  to  its  support? 

Treachery  in  the  camp  !  The  Commodore's  agent 
had  deceived  him.  His  friends  in  the  Legislature 
had  betrayed  him,  and  were  now  adding  injury  and 
insult  to  their  treachery. 

That  very  day,  while  the  whole  market  was  a  play- 
ground for  the  merry  and  exultant  bears  in  Harlem, 
in  the  recesses  of  a  mind  capacious  of  such  things, 


KEVENGE    ON   THE   MINIONS    OF   ZAMIEL.         351 

Commodore  Vanderbilt  organized  a  scheme  of  re- 
venge so  "wide  and  ample"  that  it  would  embrace 
in  one  fall  and  tremendous  circle,  faithless  adherents, 
enemies,  both  secret  and  open,  as  well  as  all  others 
whom  he  regarded  as  hostile  to  his  schemes,  in  con- 
sequence of  their  selling  short  his  pet  stock.  Sum- 
moning around  him  his  trusty  lieutenants,  he  issued 
his  orders  that  they  should  buy  every  share  of  the 
stock  that  might  be  offered  whether  on  sellers'  or 
buyers'  options,  or  for  cash  or  "  regular." 

The  bears  fortified  with  a  margin  of  thirty  or  forty 
per  cent,  profit,  were  not  displeased  with  the  oppor- 
tunity to  put  out  more  shorts  at  a  higher  price  than 
101,  and  the  contest  commenced.  As  the  price  rose, 
each  party  waxed  furious. 

Every  day,  at  the  Public  Board  or  in  the  street,  John 
M.  Tobin  could  have  been  seen  bidding  for  and  buying 
thousands  of  shares,  his  face  pale  with  excitement  and 
his  opalescent  eyes  blazing  like  a  basilisk's.  He  grabbed 
at  the  stock  with  fury,  for  he  had  suffered  by  the  decline. 

"No  feeling,  John!"  vociferated  the  crowd,  as  the 
stock  rose  with  wild  leaps  to  127. 

"  I'll  make  you  feel,"  retorted  he. 

In  ten  days,  the  stock,  in  the  face  of  enormous 
sales,  had  risen  to  150 — the  highest  price  at  which 
the  legislative  bears  had  lately  commenced  their  short 
sales.  A  week  later  and  the  price  rose  to  185,  and 
then  for  ten  days  dully  vibrated  between  175  and 
200.  When  the  movement  had  carried  the  stock  to 
140,  the  bears,  remembering  the  terrible  trouncing 
they  had  received  eight  months  before,  and  remem- 
bering also  how  sweet  was  revenge  to  their  powerful 
and  inflexible  antagonist,  began  to  reflect  and  inquire 


352  INSIDE    LIFE  IN  WALL   STREET. 

whether  it  might  not  be  advisable  to  close  up  their 
contracts  and  pocket  their  loss.  But  while  they  were 
in  this  dubious  state,  a  circumstance  occurred  which 
served  to  fortify  them  in  their  course,  and  thus  to 
lead  them  to  their  destruction. 

The  hundreds  of  bears  who  had  been  already  caught 
in  the  death-trap,  Harlem,  now  saw  approach  the 
biggest,  merriest,  most  cunning  of  all  their  tribe. 
He  nosed  the  trap,  then  put  his  forepaws  upon  it, 
and  finally  put  his  whole  body  into  it. 

It  was  Uncle  Daniel ! 

Who  would  suppose  that  he  could  have  been  de- 
ceived? But  so  it  was.  He  had  sold  (rumor  said) 
thirty  thousand  shares,  one-third  of  the  capital  stock, 
in  the  form  of  "  calls."  He  who  sells  calls  in  a  stock, 
acts  upon  the  supposition  that  the  price  will  not  rise 
higher  than  the  price  named  in  the  calls;  he  is  a 
bear,  and  the  party  who  buys  and  holds  the  calls,  is  a 
bull  in  the  stock.  A  call  sold  by  an  operator  who  is 
known  to  be  wealthy  and  able  to  respond  when  called 
upon  for  the  stock  described  in  the  call,  is  often  as  al- 
ready mentioned,* used  as  a  margin  by  the  holder  to  sell 
short  that  particular  stock.  Suppose,  for  example, 
that  Daniel  Drew  sell  to  John  Smith,  in  consideration 
of  one  hundred  dollars,  the  privilege  of  calling  on  him, 
Daniel  Drew,  for  two  hundred  shares  of  Harlem  at  145 
at  any  time  within  thirty  days.  John  Smith  takes  this 
contract  to  his  own  broker  and  orders  him  to  sell  short, 
two  hundred  shares  of  Harlem,  at  145.  If  the  price 
of  the  stock  goes  down,  John  Smith  buys  it  at  the 
reduced  price,  delivers  it  to  the  party  to  whom  he  has 
contracted  to  deliver  it  at  145,  and  makes,  as  his 
profit,  the  difference.  But  if  the  price  rises  and  shows 


UNCLE   DANIEL   SELLING   CALLS.  353 

John  Smith  a  loss,  he  then  calls  upon  Daniel  Drew  to 
deliver  the  stock  at  145.  This  keeps  John  Smith 
whole  in  the  transaction. 

By  selling  thirty  thousand  shares  in  the  form  of 
calls,  Daniel  Drew  had  really  loaned  his  credit  to  the 
amount  of  millions  to  the  call-holders,  to  be  used  in 
the  form  of  margins  on  which  to  sell  Harlem,  short. 
In  this  way,  for  the  trifling  consideration  of  $15,000, 
paid  to  him  by  the  call-holders,  he  helped  to  forge 
the  very  chains  in  which  he  was  soon  to  be  led  cap- 
tive at  the  chariot  wheels  of  the  triumphant  Harlem 
ring. 

When  it  became  noised  abroad  that  Uncle  Daniel 
stood  ready  to  sell  calls  on  Harlem,  running  for  thirty 
or  sixty  days,  the  bears  knew  that  a  powerful  and 
crafty  ally  had  joined  them.  The  calls  were  eagerly 
snatched  by  those  who  wished  to  hold  them  for  a 
rise,  as  well  as  by  those  who  used  them  as  a  margin 
to  sell  short.  Members  of  the  ring  snapped  them  up 
greedily.  L.  W.  Jerome  and  John  M.  Tobin,  person- 
ally held  calls,  which  a  few  weeks  after  showed  Drew 
indebted  to  them  $138,000. 

The  speculative  public  were  selling  Harlem  all 
through  the  street.  Conservative  brokerage  houses 
sold  it  slyly.  The  whilom  bull,  A.  G.  Jerome,  al- 
though his  brother  Leonard  was  heavily  embarked 
in  the  upward  movement,  was  a  large  seller  of  the 
stock.  Any  broker  who  had  Harlem  in  his  office 
could  lend  it  any  moment  of  the  day,  to  those  who 

were  selling  short.  One  of  the  customers  of  L. 

&  Co.,  had  six  hundred  shares  of  the  stock.  These 
certificates  were  loaned  to  another  customer,  who  sold 
it  short  to  the  ring,  who  then,  after  taking  the  num- 


354  INSIDE    LIFE    IN   WALL    STREET. 

bers  on  the  certificates,  loaned  it  to  another  bear  who 
sold  it  again,  in  open  market,  to  the  ring.  This  ope- 
ration was  repeated  six  times,  by  as  many  different 
men,  who  all  went  short  of  Harlem,  using  these  iden- 
tical certificates  for  that  purpose. 

As  the  price  approached  200,  through  all  the  dark- 
ness which  hung  over  the  short  sellers,  only  one  ray 
of  hope  gleamed.  They  saw  something  drawing 
near ;  itself  a  gloomy  and  terrible  shape,  to  them  it 
had  rather  a  semblance  of  brightness  and  deliverance. 
It  was  Panic,  to  which  they  looked  for  relief!  Panic, 
which  would  be  ruin  to  a  thousand  others,  would  be 
salvation  to  them,  for  it  would  throw  Harlem  down 
in  its  sweep,  and  help  them  to  fill  their  contracts. 

That  panic  was  not  wholly  due  to  the  action  of 
Secretary  Chase  in  selling  gold  and  locking  up  green- 
backs; it  was  heightened,  beyond  doubt,  by  firms 
who  were  short  of  Harlem,  and  were  willing  that  the 
public  should  suffer  frightful  losses,  provided  only 
Harlem  could  be  broken  down,  so  that  they  could 
extricate  themselves  from  their  unfortunate  position 
as  short  sellers. 

The  18th  of  April  came,  but  it  brought  no  deliver- 
ance for  them.  In  vain  they  strove  to  make  money 
still  tighter,  and  filled  the  whole  market  with  their  dis- 
mal auguries,  though  stocks  were  falling  on  every  side, 
and  the  hammer  blows  rained  on  Harlem,  it  stood 
like  a  rock.  Now  that  the  panic  was  past,  they 
could  only  stand  and  gaze  stupidly  at  their  enemy, 
and  still  hope  for  that  which  was  never  to  come,  a 
break  in  the  corner. 

The  agony  was  soon  to  be  over.  One  day  in  May, 
when  Harlem  was  selling  for  upwards  of  200,  the 


A  HEAVY  LOSS  OX  HARLEM.         355 

manipulators  of  the  stock  called  on  the  Commodore, 
and  told  him  that  they  held  stock,  or  contracts  for 
stock,  to  the  amount  of  twenty-seven  thousand  more 
shares,  than  the  whole  capital  of  the  company,  which 
was  $4,500,000.  Then?  gaid  Vanderbilt,  put  the 
price  up  to  1,000.  The  manipulators,  including  John 
Morrissey,  demurred  to  this,  on  the  plea  that  this  pro- 
ceeding would  break  every  house  in  the  street.  Ac- 
cordingly, it  was  decided  that  300,  or  thereabouts, 
would  be  a  more  judicious  figure.  Straightway  Har- 
lem rose,  in  long  leaps,  until  it  reached  285.  At  that 
point  it  was  firmly  held.  The  very  day  it  reached 
this  price,  contracts  matured  for  the  delivery  of  more 
than  fifteen  thousand  shares  of  the  stock.  These 
were  closed  at  a  loss  of  over  one  million  dollars  to  the 
short  sellers. 

The  Commodore  was  taking  his  revenge.  Five 
hundred  strong  men,  hard  of  head  and  deep  of  coffer, 
lay  at  his  mercy.  Never  telling  their  losses,  one 
by  one  as  "mute  as  fox  mong'st  mangling  hounds," 
they  walked  up  to  the  offices  of  the  brokers  of  that 
terrible  old  man,  and  settled  their  differences.  Each 
morning  new  wrinkles  seemed  to  have  been  graven, 
and  old  lines  hardened,  in  their  faces.  As  for  the 
smaller  tribe  of  the  entrapped  ones,  they  were  caught 
up  and  whirled  away  like  chaff,  never  to  show  their 
faces  in  the  street  again.  No  one  but  they  and  their 
payers  will  ever  know  the  amount  paid  by  all  these 
men  who  were  short  of  Harlem,  but  the  aggregate 
would  foot  up  something  frightful. 

But  how  dirl  the  greatest  bear  of  all,  to  wit,  Uncle 
Daniel,  succeed  in  extricating  himself  from  the  trap 
in  which  he  found  himself  fast  caught?  His  losses 
22 


356  INSIDE    LIFE   IN   WALL   STEEET. 

on  Harlem  at  285,  would,  it  was  said,  amount  to  $1,- 
700,000.  This  would  take  a  large  slice  out  of  his  late 
profits  on  Erie.  His  first  movement  was  to  throw 
himself  on  the  tender  mercies  of  the  Commodore, 
and  plead  old  friendship,  etc.  Vain  appeal!  The 
bosom  of  the  ancient  steamboat  mariner  and  rail- 
road king  was  steeled  against  the  entreaties  of  the 
old  bear,  and  he  very  pertinently  inquired  whether, 
if  Harlem  had  fallen  to  75,  instead  of  rising  to  2S5y 
he  would  in  that  case,  have  paid  any  portion  of  his 
(Yanderbilt's)  losses.  Failing  in  this  appeal,  his  next 
movement  was  to  set  up  the  plea  of  conspiracy,  and 
that  he  had  been  entrapped  by  false  representations, 
etc. ;  "  besides,"  said  he,  "  these  contracts  merely  say 
that  you  may  call  upon  me  for  so  much  stock ;  they 
say  nothing  about  my  delivering  the  stock.  Call  then, 
and  keep  calling,  I  am  not  obliged  to  deliver  any 
stock."  So  he  stood  at  bay,  telling  his  opponent  to 
seek  redress  in  the  courts  of  law. 

But  as  Wall  Street  abhors  litigation,  a  compromise 
was  at  last  talked  of.  Tobiii  and  L.  W.  Jerome  were 
now  nearly  every  day  closeted  with  him,  in  his  den 
at  No.  15  William  Street,  and  a  settlement  was  at  last 
effected  for  about  one  million. 

After  the  price  of  Harlem  had  been  kept  in  the 
neighborhood  of  280  long  enough  to  close  all  the  short 
contracts  held  by  the  ring,  it  fell  like  lead  to  115,  and 
not  a  single  bear  could  be  found  with  hardihood  enough 
to  sell  it  for  future  delivery  during  its  downward  course. 

This  Harlem  rise  is  said  to  have  crippled  or  ruined 
more  men  than  any  similar  movement  in  the  annals 
of  Wall  Street,  while  it  enriched  and  gave  new  pres- 
tige to  Vanderbilt,  who  in  connection  with  his  associ- 


CALLS    AND   ANSWERS.  357 

ates  in  the  movement,  is  said  to  have  netted  money 
enough  to  buy  the  whole  capital  stock. 

I  now  return  to  the  story  of  the  six  hundred  shares 
of  Harlem,  of  which  I  was  short,  at  an  average  of  200. 
Of  course,  as  the  price  rose,  I  "sat  on  my  shorts," 
clinging  manfully  to  my  loss  after  the  most  approved 
Wall  Street  plan.  At  280  I  had  to  close  like  my 
ursine  brothers,  and  found  my  loss  $24,000.  I  had 
hoped,  however,  that  this  would  be  diminished  to  the 
amount  of  $8,000,  since  the  two  hundred  shares  sold 
at  200  was  secured  by  the  call  before  mentioned,  which 
a  wealthy  (?)  operator  had  sold  me  a  few  weeks  before 
for  the  trifling  sum  of  $12.50.  This  occurred  in 
a  moment  of  badinage  at  Delmonico's,  when  the 
wealthy  (?)  operator  (while  Harlem  was  selling  at 
130),  offered  me  the  privilege  of  calling  on  him  at 
any  time  within  sixty  days,  for  two  hundred  shares 
at  200,  in  consideration  of  the  trifling  sum  last  named. 

But  an  operator,  wealthy  on  the  first  of  April,  is 
not  necessarily  so  on  the  twenty-fifth  of  May  follow- 
ing, at  least  in  Wall  Street.  The  operator  in  ques- 
tion had  been  laid  low  in  the  Morse  panic,  and  when 
I  called  for  two  hundred  shares  at  200,  the  response 
was  anything  but  satisfactory,  in  fact  to  the  extent 
of  $8,000  out  of  my  little  surplus. 

As  for  W.  B.  C ,  he  kept  his  call,  and  when  the 

price  was  275,  he  called  and  was  answered.  He  made 
exactly  $10,000  out  of  what  cost  him  only  $50. 

It  was  while  smarting  under  the  Harlem  flagella- 
tion that  I  made  my  first  operation  in  cotton,  buying 
one  hundred  bales  of  that  useful  staple  at  87 £  cents 
per  pound.  The  history  and  result  of  this  speculative 
purchase  will  be  given  hereafter,  under  another  head. 


CHAPTER  XXII. 

IN    SEARCH    OF    A    BROKER— THE    GOLD-BURST    UP- 
WARDS—DULL TIMES. 

The  Three  Brokers;  a  Vulture,  a  Sparrow,  and  a  Jolly  Boy — Brokers' 

,  Safes  are  Like  the  Lion's  Den — Lunching  in  the  Office  of  N • 

&  Co.— We  Find  What  We  are  Looking  For,  and  Put  Our  Margins 
in  the  Lunch- Room— A  Jag  of  $50,000  Gold  and  What  Came  of  It 
— Beautiful  June  and  Halcyon  Days  for  the  Quartette — A  Financial 
Dissertation  at  an  Inn  on  the  Iload — The  Military  Outlook — Grant's 
Hand  on  the  Throat  of  the  Rebellion — Congressional  Folly  and  Its 
Consequences— The  Gold  Bill— We  Take  a  Trip  to  Rockaway— Tele- 
graphing in  Cipher — Wherein  of  a  Telegraphic  Puzzle — The  Gold 
Burst— A  Mistake  Which  Gave  Me  a  Profit  of  $85,000— Buying 
50  Gold  Instead  of  Selling  50. 

iHE  customer,  after  every  severe  loss,  is  apt  to 
cherish  towards  his  natural  enemy,  the  broker, 
a  feeling  of  dissatisfaction,  not  to  say  mild 
indignation.  Thereupon  he  casts  about  him  for  an- 
other broker,  some  paragon  who  may  do  his  little 
business  for  him,  and  render  him  happy  with  a  con- 
tinuous series  of  the  plumpest  and  most  delicious  of 
profits,  over  which  the  shadow  of  a  loss  may  never 
come.  He  must  be  young  and  jolly,  and  honest  of 
course.  He  must  be  ready  to  communicate  the  most 
reliable  points,  he  must  never  be  obstreperous  on  the 
subject  of  margins,  and  above  all  he  must  always,  and 
under  all  circumstances,  be  buoyant. 

-L enjoyed  an  extensive  acquaintance  among 

those  gentry  who  are  popularly  supposed  to  do  a 


IX   SEARCH   OF   A   BROKER.  359 

"  strictly  commission  business  in  buying  and  selling 
stocks."  On  learning  that  I  was  in  search  of  some- 
thing new  and  improved  in  that  line,  he  kindly  of- 
fered to  show  me  what  I  wanted,  viz.,  a  broker  who 
was  an  "entire  and  perfect  chrysolite."  "The  first 

man  I  shall  introduce  you  to,"  remarked  L after 

we  had  set  out  on  our  search  for  this  paragon  broker, 
"  may  not  be  a  very  prepossessing  man  at  first  sight, 
but  I  can  indorse  him  as  in  every  respect,  the  man 
for  your  money.  I've  just  made  ten  thousand  in  his 

office!"     This  little  profit  had  prejudiced  L ,  I 

think ;  for  a  moment  after,  on  entering  the  office  of 
the  individual  referred  to,  I  saw  a  tall,  heavily-beaked 
man,  who  was  craning  over  a  couple  of  customers 
with  bony  knees  and  wearing  a  flaccid  drained  look, 
and  apparently  impressing  on  them  the  necessity  of 
handing  over  more  margin,  or  of  being  sold  out  in- 
continently. Physiognomy  has  certainly  something 
to  do  with  the  selection  of  an  agent  to  buy  and  sell 
stocks,  though  it  does  not  always  follow  that  a  man 
may  not  smile,  and  smile,  and  yet  be  a  broker.  As 
soon  as  introduced,  I  began  to  study  the  face  of  the 
tall  man.  The  ruling  expression  suggested  only  one 
trait,  and  that  conspicuously — cruelty — which  wan- 
dered through  and  lurked  in  every  line  of  his  face, 
but  took  up  its  permanent  abode  in  his  eye — that 
cruel  eye.  The  bony  knees  of  the  flaccid-looking 
customers  and  that  cruel  eye  were  enough.  We 
hastened  away  to  continue  our  search  for  the  paragon 
aforesaid. 

The  next  office  we  entered  was  that  of  W , 

quite  a  different  kind  of  man.  If  the  tall,  heavily 
beaked  man  from  whom  we  had  just  parted  brought 


360  INSIDE    LIFE    IN   WALL    STREET. 

to  my  mind  the  solitary  vulture,  W as  strongly 

reminded  me  of  a  chirping  sparrow  constantly  in  pur- 
suit of  worms.  He  was  a  short  man,  with  a  magnifi- 
cent chest  and  slender  legs,  dressed  in  a  style  of 
sombre  gorgeousness.  He  never  was  quiet  an  instant. 
Now  dancing  up  and  down  the  street;  now  taking 
short  flights  to  the  Board;  then  back  again,  perching 
for  a  moment  in  his  office  and  off  once  more.  He 
seemed  to  be  constantly  in  pursuit  of  worms — I  mean 
orders.  He  had  little  time  to  talk  English.  His 
language  was  the  Wall  Street  patter,  clipping  syl- 
lables audaciously.  Commission,  which  seemed  to 
be  the  most  frequent  word  in  his  vocabulary,  he  called 
"cornmish,"  "Pittsburg,"  "Pitts,"  and  so  on. 

Action  is  the  essential  of  oratory,  first,  last,  and 
always,  said  Demosthenes.  Activity  is  the  essential 
of  the  brokerage  business.  Activity  means  orders  to 
buy  and  sell.  Activity  means  commissions  for  the 
broker.  But  I  had  discovered  some  time  before  this, 
that  activity  on  the  part  of  the  broker  was  productive 
of  large  brokerage  bills,  which  his  customer  would 

have  to  pay.     W was  a  trifle  too  active  in  the 

line  of  commissions,  and  so  we  looked  farther. 

"Now,"  said  L "I've  thought  of  the  man  to 

take  care  of  your  margins." 

And  while  he  was  speaking,  he  opened  the  door 
which  conducted  into  the  banking  and  brokerage 

house  of  N &  Co.     The  first  feature  that  struck 

the  eye,  on  entering  this  office,  was  the  safes.  In 
one  corner  stood  a  large  salamander  safe;  sunk  in 
the  wall  there  was  a  burglar  proof  safe ;  under  the 
cashier's  desk,  there  was  a  small  safe,  which  looked 
like  a  lineal  descendant  of  the  salamander,  before 


LUNCHING  IN   A   BROKER'S    OFFICE.  361 

named.  All  this  conveyed  the  idea  of  security,  at 
least,  for  the  banking  and  brokerage  firm.  Ex- 
perience has  certainly  taught  us,  at  this  date,  how- 
ever, that  brokers'  safes  are  like  the  lion's  den,  the 
tracks  of  the  gentler  beasts  all  lead  in,  and  none  lead 
out  from  it.  A  constant  stream  of  checks  pass  away 
from  the  relaxed  fingers  of  the  customers,  and  flow 
into  those  chilled  iron  doors ;  but  never  again  do  they 
flow  out  to  gladden  his  heart,  or  to  be  crumpled  up 
in  his  "  itching  palm." 

From  the  private  office  of  this  house,  came  a  sound 
of  mirth  and  revelry,  mingled  with  the  clinking  of 
glasses  and  the  clattering  of  knives  and  forks.  A 
slim  clerk,  dressed  in  the  height  of  the  fashion,  nod^ 
ded  gaily  as  we  entered,  and  then  jumped  off  the 
high  stool,  on  which  he  was  sitting  before  a  desk, 
protected  by  a  lofty  barrier  of  black  walnut,  and 
walking  rapidly  to  the  private  office,  threw  open  the 
door,  disclosing  thereby  a  banqueting  scene.  Several 
men  were  sitting  around  a  table  loaded  with  the  del- 
icacies of  the  season,  and  surmounted  with  tall,  slen- 
der flasks,  bearing  such  labels  as*  haul  sauterne, 
amontillado,  etc.  Beside  each  chair  was  a  cham- 
pagne cooler,  from  out  of  which  protruded  the  neck 
of  a  bottle  swathed  in  ice.  We  thought  at  first  sight 
that  we  had  made  a  mistake,  and  were  in  a  restau- 
rant, where  .some  board  of  a  mining  company  was 
celebrating  the  anniversary  of  subscription  day.  But 
we  were  quickly  undeceived,  by  the  appearance  of 
the  senior  member  of  the  house,  wiping  a  bit  of  lob- 
ster salad  from  his  exuberant  beard.  He  was  a  stout, 
well-fed  man,  with  a  dome  of  brow  fit  for  the  intel- 
lectual habitation  of  some  illustrious  statesman,  and 


362  INSIDE    LIFE  IN   WALL    STKEET. 

thinly  adorned  with  blonde  curls.  After  introductions 
had  been  exchanged,  he  led  us,  nothing  loth,  to 
two  vacant  seats,  which,  as  he  remarked,  seemed  to 
have  been  providentially  reserved  for  us.  As  "swift 
as  dreams,"  we  found  our  plates  heaped  with  good 
things,  then  was  heard  a  gurgling  sound,  as  of  a  hidden 
brook,  and  a  moment  after,  healths  all  round  were 
drunk  in  champagne  frappe,  out  of  the  most  deli- 
cately-moulded, wide-brimmed  French  glass  beakers. 

N sat  at  the  head  of  the  table,  uttering  in  a 

barytone  voice  between  mouthfuls  of  salad,  the 
most  daring  financial  paradoxes  interspersed  with 
amusing  anecdotes,  in  which  he  dwelt  with  much 
humor  upon  the  singular  facility  with  which  the 
margins  of  speculators  were  disposed  of.  Then  he 
passed  into  the  prophetic  vein  and  predicted  future 
rises  to  empyrean  heights.  Gold  and  its  future 
course  seemed  to  be  his  pet  theme.  It  was  to  rise 
to  300  within  six  months,  and  on  this  assertion  he 
booked  a  little  bet  with  a  sallow  complexioned  gen- 
tleman on  the  opposite  side  of  the  table. 

The  genial  glow  diffused  by  the  lunch,  and  the 
barytone  buoyant  predictions  as  to  the  course  of  gold, 
had  their  due  effect.  In  fifteen  minutes  after  the 
company  rose  from  the  table,  I  had  deposited  all  my 

cash  with  N &  Co.,  who  then  bought  for  me 

$50,000  in  gold,  which  cost  179.  Then  I  introduced 

3 and  W.  B.  C to  the  convivial  man  with 

the  fine  dome  of  brow  and  keen  financial  apprehen- 
sion. They  also  took  flyers  in  gold,  and  on  the 
strength  of  this  thought  themselves  entitled  to  the 
privileges  of  lunch  which  was  spread  every  day  in 
the  most  sumptuous  style.  It  may  be  here  related 


HALCYON   DAYS.  363 

that  E informed  me  several  months  after,  that 

these  lunches  had  cost  him  an  average  of  $200 
dollars  each,  a  fact  that  he  was  reminded  of  on  con- 
templating the  last  account  which  N &  Co.  had 

rendered  him,  on  taking  leave  of  their  eminent  bank- 
ing and  brokerage  house. 

After  that  we  spent  two  or  three  weeks  very  pleas- 
antly, exercising  our  steeds  and  airing  our  light  wag- 
ons and  phaetons  in  the  park,  breakfasting  out  on 
the  road,  dining  at  Delmonico's,  and,  of  course,  lunch- 
ing at  our  broker's,  where  we  "lay  off"  on  ample  so- 
fas and  dabbled  in  stocks,  losing  more  than  we  made, 
but  caring  little  for  this,  so  long  as  gold  kept  us  more 
than  whole  by  rising  to  198. 

Beautiful  June,  queen  of  the  months,  was  come. 
Perfect  days,  and  nights  more  beloved  than  the  days. 
South-west  winds  at  evening,  and  bespangled  skies 
of  unfathomable  blue. 

It  was  on  one  of  those  matchless  nights  that  we 
sat  on  the  piazza  of  a  suburban  hotel,  on  the  High 
Bridge  road.  We  heeded  not  the  "  unutterable  glory 
of  the  "stars,"  nor  the  breath  of  "the  sweet  south," 
but  were  deep  in  the  discussion  of  gold,  its  future 
course,  etc.,  all  the  while  sipping  our  Cliquot  and 
puffing  furiously  at  the  finest  regalias. 

From  August  1863,  gold  had  been  steadily  rising 
from  122,  the  point  it  reached  after  a  series  of  Union 
successes.  This  rise  seemed  to  depend  little  upon 
those  temporary  and  artificial  causes  which  make 
stocks  go  up.  The  laws  of  commerce  and  of  money 
were  at  work,  steadily  depreciating  the  value  of  paper 
currency,  and  so  affecting  the  market  price  of  the 
precious  metal.  This  rise  was  founded  on  reason. 


364  INSIDE    LIFE    IN  WALL   STEEET. 

The  amount  of  paper  currency  was  already  more  than 
five  times  greater  than  before  the  war.  That  gold 
should  have  ever  risen  above  200,  is  not  wonderful. 
The  wonder  is  that  it  never  rose  to  500.  The  fact 
that  it  did  not  so  rise,  proves  the  confidence  of  the 
great  body  of  the  American  people  in  the  resources 
of  their  country  and  in  the  ultimate  success  of  the 
Union  army. 

The  tremendous  panic  of  April  18th,  produced  little 
effect  upon  the  price  of  gold.  There  was  no  com- 
bination in  it  like  those  which  sent  stocks  so  wildly 
upwards,  nor  did  its  movements  depend  upon  the 
scarcity  or  abundance  of  money  to  be  loaned  in  the 
market  place.  Upon  the  results  of  the  summer  cam- 
paign on  the  Potomac,  depended  its  future  course. 
Victory  would  bring  down  the  price ;  defeat  and  even 
a  doubtful  issue  would  cut  the  cord,  and  away  the 
price  would  fly  into  the  clouds. 

Twelve  myriads — one  hundred  and  twenty  thou- 
sand good  men  and  true,  horse,  foot,  and  artillery — 
were  lying  on  their  arms  north  of  the  Rapidan,  wait- 
ing for  the  two  words  of  command.  One  bright  May 
morning  those  words  passed  through  the  ranks — 
"forward!  march!"  Corps  after  corps,  division  after 
division,  brigade  after  brigade,  regiment  behind  regi- 
ment, they  swept  across  the  stream,  soon  to  be  red- 
dened with  their  blood;  on,  threading  the  death- 
labyrinths  of  the  wilderness,  piling  great  mounds  of 
shroudless  graves  around  Spotsylvania  and  Cold  Har- 
bor, and  gathering  at  last  in  dusky  circles  about 
Richmond  and  Petersburg. 

Of  all  the  millions  of  eyes  that  watched  the  on- 
ward march  of  the  Grand  Army  of  the  Potomac,  none 


GETTING   NEWS   FROM   THE   FRONT.  365 

were  riveted  upon  it  so  closely  as  the  gold  spec- 
ulators. Every  source  of  early  information  from 
the  front  was  explored.  It  was  not  enough  to  scru- 
tinize the  columns  of  the  daily  press  for  every  scrap 
of  army  news;  the  telegraph  operators  were  subsi- 
dized, government  officials  were  tampered  with,  and 
a  more  perfect  system  of  couriers  and  messages 
adopted,  in  order  to  advise  the  speculators  as  to  the 
exact  condition  of  matters  on  the  Rapidan,  the  Pa- 
munkey,  and  the  James  River.  If  a  great  army 
movement  was  about  to  take  place,  the  gold  specula- 
tor in  Wall  Street  would  receive  a  message  from  his 
coadjutor  at  Washington,  or  at  the  front,  something 
like  this,  "John  is  still  here."  If  an  engagement, 
disastrous  to  the  Federal  army,  had  taken 'place, 
word  would  come  "Henry  is  worse."  This  meant, 
"buy  gold."  Or  if  a  victory  had  been  won,  "John 
is  sitting  up  to-day."  This  meant,  "sell  gold." 

It  would  be  safe  to  assert  that  there  were  only  two 
classes  of  persons  who  always  knew  the  exact  status 
of  the  campaign.  First,  the  government;  second, 
the  gold  operators,  for  both  these  classes  obtained 
the  earliest  information,  not  only  from  the  Union,  but 
from  the  Rebel  army. 

When,  after  a  series  of  bloody  battles  and  flanking 
movements,  Grant  was  preparing  to  draw  his  lines 
around  Richmond,  it  might  have  been  expected  that 
the  price  of  gold  would  have  declined.  But  these 
successes  were  interpreted  by  financiers,  to  be  of  a 
character  not  sufficiently  decisive  to  affect  the  price, 
which  stood  firmly  at  198. 

Something  new  now  entered  into  the  calculations 
of  the  gold  dealers.  Congress  had  just  passed  a  bill 


366  IXSIDE    LIFE    IN   WALL   STEEET. 

affixing  severe  penalties  to  the  practice  of  dealing  in 
gold  by  contract  for  future  purchases  and  delivery, 
and  that  bill  only  lacked  the  President's  signature  to 
become  a  law.  How  would  this  affect  the  price  of 
gold?  The  act  intended  to  repress  speculation  in 
the  metal,  passed  March,  1863,  had  been  used  as  an 
argument  to  throw  gold  down  from  172  to  156.  This 
was  the  problem  which  puzzled  us,  as  we  discussed 
matters  on  that  pleasant  June  evening.  On  the 
whole,  we  were  inclined  to  sell,  but  came  to  no  de- 
cision then,  though  we  had  dwelt  upon  the  subject  till 
the  last  light  wagon  had  bowled  past  us  in  the  direction 
of  the  city.  Then  we  whistled  for  our  team.  It  was 
sharp  twelve,  before  we  reined  in  our  dapple  grays 
in  front  of  their  stable  door,  and  betook  ourselves  .to 
our  several  hotels. 

When  we  met  the  next  morning,  two  things  were 
settled  upon.  First,  we  would  sell  our  gold  at  the 
market  price.  Second,  we  would  unite  in  a  trip  to 
the  sea-side.  L was  the  arithmetician  and  tele- 
graph operator  of  the  party,  and  so  to  him  was  dele- 
gated the  matter  of  giving  the  order  to  sell,  which  we 

were  to  send  down  to  the  office  of  N &  Co.  by 

the  city  telegraph. 

Previously  to  this  we  had  agreed  with  N & 

Co.,  upon  a  telegraphic  cipher,  as  follows,  viz. :  "Ben" 
meant  sell, "jag  "  meant  our  gold,"  whirl "  meant  at  the 
market  price,  and  "Bob"  meant  buy.  Our  telegram 
read  thus :  "  Ben,  jag,  whirl,  answer  to  us  at  Rocka- 
way,  signed,  etc.,  etc.,  etc." 

In  three  hours  after,  we  stood  on  the  smooth,  firm 
beach  at  Rockaway,  listening  to  the  breakers'  roar. 
It  was  not  till  the  next  day,  that  we  received  from 


A   TELEGRAPHIC   PROBLEM.  367 

our  buoyant  and  festive  broker,  the  following  tele- 
gram :  "  Got,  jag,  Wiggins,  whirl,  Morrissey,  everything 

lovely,  signed,  etc.,  N &  Co."  Which  being 

translated,  signified:  "Got  your  gold  at  199 J,  mar- 
ket price  strong  and  higher.  Everything  lovely." 

This  telegram  bothered  us.  Instead  of  saying 
Benny,  which  meant  sold,  our  broker  had  written 
got.  On  this  fine  old  Anglo-Saxon  word  got  we  held 
a  philological  discussion,  It  seemed  here  to  signify 

bought.  But  our  order  was  to  sell.  L having 

sent  the  telegram  giving  the  order  to  sell,  defended 
the  answer  vigorously,  and  asserted  that  got  was  here 
applied  to  the  getting  of  our  profit,  or  it  might  mean- 

a  joke  on  the  part  of  N to  inform  us  that  we 

were  "got"  by  selling  out  just  before  the  price  rose. 
But  what  logical  connection  in  that  case  between  the 
fact  that  the  price  had  risen  after  we  had  sold  and  the 
expression  "  everything  is  lovely  ?"  The  discussion 
was  brought  to  an  end,  however,  as  soon  as  we  recol- 
lected that  our  telegram  was  certainly  correct ;  and 

if  N &  Co.  had  made  a  mistake  we  could  hold 

them  responsible  for  any  consequences  disastrous  to 
ourselves  arising  therefrom. 

The  stock  operator  is  rarely  much  of  a  society-man. 
It  is  never  written  on  his  tombstone,  "sociability 
was  his  pride."  At  the  watering-places,  instead  of 
passing  his  time  with  that  portion  of  the  fair  sex, 
who  there  resort,  forming  what  is  usually  known  as 
society,  he  withdraws  to  quiet  corners,  calls  around 
him  his  little  clan  of  fellow-operators,  and  occupies 
and  diverts  himself  with  exchanging  views,  conning 
telegrams,  rummaging  in  the  money  articles  of  New 
York  dailies,  and  chewing  the  sweet  and  bitter  cud 


368  INSIDE    LIFE    IN   WALL   STEEET. 

of  prospective  profit  and  loss.  While  thus  engaged 
for  ten  days,  our  coterie  became,  from  tune  to  time, 
apprised  of  the  flutterings  of  the  Volscians  at  Corioli, 
otherwise,  the  gold  dealers  of  New  York. 

Great  doings  on  'Change ! 

The  law  of  Congress,  forbidding  all  time  contracts 
in  gold,  under  penalty  of  heavy  fine  and  imprison- 
ment, first  took  effect  on  the  21st  of  June. 

This  piece  of  legislative  fatuity,  was  promptly  in- 
terpreted by  the  financiers,  as  a  confession  of  weak- 
ness on  the  part  of  the  government,  and  of  its  con- 
viction that  the  war  was  to  be  a  protracted  one.  Its 
first  effect  was  to  compel  all  who  were  short  of  gold, 
to  cover  their  contracts.  The  demand  thus  suddenly 
created,  drove  up  the  price  in  one  day  to  225.  Its 
second  effect  was  to  throw  out  of  gearing,  the  entire 
machinery  of  the  banking,  and  of  the  importing  mer- 
cantile business ;  for  time  contracts  in  gold,  ever  since 
1862,  have  been  employed  in  legitimate  trade,  as 
well  as  in  speculation. 

When  an  importer  wishes  to  pay  duties  on  his  goods, 
or  remit  exchange  to  Europe,  he  borrows  gold  of  his 
bank  at  the  market  price,  provided  he  thinks  gold  is 
going  down,  and  buys  gold  in  the  market  for  the 
same  purpose,  whenever  he  thinks  that  gold  is  going 
up.  If  gold  should  go  down  in  the  former  case,  then 
he  repays  the  gold  borrowed  of  the  bank,  buying  it 
in  the  market  at  the  lower  price  to  which  it  may  have 
fallen,  thus  making  his  profit ;  and  if  gold  goes  up  in 
the  latter  case,  his  imported  goods  will  feel  the  effect 
of  the  rise,  and  in  this  way  he  also  makes  a  profit. 

On  the  23d  of  June,  gold  sold  for  245,  and  during 
the  week  which  ensued,  it  vibrated  twenty  and  thirty 


THE  PLEASING  SOLUTION  OF  THE  PROBLEM.  371 

per  cent,  a  day,  throwing  the  commercial  community 
into  the  greatest  confusion.  The  price  soon  reached 
the  highest  point  known  during  the  war. 

Meetings  in  the  Chamber  of  Commerce  were  held, 
and  petitions  forwarded  to  Washington,  praying  for 
the  repeal  of  the  law.  But  though  the  repeal  took 
place  shortly  after,  it  did  not  undo  the  mischief 
which  had  been  wrought.  Gold  did  not,  for  many 
months,  fall  back  to  185,  the  point  from  which  it 
started  upwards,  when  the  gold  bill  was  first  agitated 
in  Congress. 

"We  set  out  for  New  York,  on  the  first  of  July,  in 
consequence  of  receiving  another  mysterious  tele- 
gram from  our  broker.  This  message  read  as  follows, 
viz.:  "Hannah  is  jumping  now,  what  shall  I  do?" 

"Hannah"  was  gold.  What  did  N &  Co.  mean? 

They  seemed  to  be  soliciting  orders  very  strangely. 
The  last  train  down  from  Jamaica,  was  delayed  by 
an  accident.  We  reached  the  Fifth  Avenue  Hotel 
just  after  the  Evening  Exchange  had  adjourned.  As 
we  entered  the  hall,  a  short,  rubicund  gentleman, 

whom  we  recognized  as  one  of  the  customers  of  N 

&  Co.,  hailed  us  as  if  we  were  so  many  rising  suns, 
and  grasping  our  several  hands  with  fervor,  congrat- 
ulated us  on  our  good  luck. 

"Good  luck?  Oh,  in  gold.  Yes,  we  have  done 
pretty  well,  about  $10,000  apiece,"  was  the  response, 

"About  $10,000 !  Why,  the  book-keeper  of  N 

&  Co.  told  me  to-day  that  you  could  sell  out  for  sixty- 
five  thousand  dollars  apiece.  Gold  sold  for  55  to-day, 
(i.  e.  255,)  you  know." 

A  light  broke  in  upon  us  at  these  words.  The 
mysterious  telegrams  were  now  as  clear  as  noon-day. 


372  INSIDE    LIFE   IN   WALL    STREET. 

N &  Co.,  instead  of  selling  our  gold  at  199i, 

must  have  bought  as  much  more.  We  exchanged 
significant  glances,  and  received  the  congratulations 
of  the  rubicund  gentleman  quite  as  a  matter  of  course. 

Just  at  this  juncture,  entered  N ,  looking,  if  that 

were  possible,  more  exuberant  than  when  I  first  saw 
him  dispensing  the  favors  of  his  lunch  table.  He 
also  congratulated  us  on  our  good  fortune.  On  the 
last  lot  of  fifty  gold,  which  cost  199  i,  there  was  a  profit 
of  about  $28,000,  and  on  the  first  lot  of  fifty,  which 

cost  me  179,  there  was  a  profit  of  $37,500,  as  N 

rapidly  showed  me  by  figures  in  his  memorandum 
book.  This  profit  was  on  the  basis  of  gold  at  255. 
"What  would  I  do;  sell  out  on  the  spot?"  "No, 
wait  till  to-morrow."  I  waited,  and  sold  out  at  275 
the  next  day,  which  was  the  2d  of  July,  when  as 
every  one  will  remember,  gold  sold  up  to  285.  My 

profits  were  $85,000  net.     It  appears  that  N & 

Co.  had  made  a  mistake  in  reading  L 's  telegram, 

instructing  them  to  sell  our  gold,  and  had  read  "Ben," 
i.  e.  sell,  as  "  Bob,"  i.  e.  buy,  and  so  bought  another  lot 
at  199 i,  instead  of  selling  what  we  had. 

It  would  fill  a  volume  to  give  an  account  of  the 
fortunes  made  and  lost  during  the  eleven  days  from 
June  22d  to  July  2d.  One  bold  broker,  doing  busi- 
ness on  a  capital  of  $9,000  bought  $250,000  of  gold 
at  about  200  at  the  Evening  Exchange  on  the  21st 
of  June,  and  by  a  series  of  lucky  operations,  selling 
at  higher  rates  and  buying  back  at  lower  rates,  as 
the  price  oscillated,  found  himself  in  forty-eight  hours 
$140,000  richer.  Another  man  who  had  on  the  20th 
of  June  been  obliged  to  cover  his  shorts  with  the  loss 
of  everything  that  could  possibly  be  used  as  a  margin, 


A.   BROWN    STOKE   FRONT.  373 

excepting  three  diamond  studs,  pawned  these  for  $200, 
and  in  a  week  had  made  from  this  little  capital, 
over  $12,000. 

Our  quartette  drew  out  all  our  profits  from  N 

&  Co.,  got  our  several  checks  certified  at  the  bank, 
and  having  carried  them  in  our  pocket  for  two  days, 

then  went  back  and  deposited  them  with  N &  Co. 

as  margin  for  a  new  campaign.     L ,  however, 

bought  a  brown  stone  front  with  part  of  his  profits,  and 
there  every  evening  we  held  a  council  of  four,  deliber- 
ating how  we  might  increase  our  file. 
23 


CHAPTER  XXIII. 
DULL  TIMES— AVERAGING   ON   "POINTS." 

A  Retrospect  of  the  Situation — An  Army  Without  Leaders— Description 
of  a  Dull  Market— "  Playing  With  Stocks  "  to  the  Tune  of  $22,000 
— Buying  on  "Points" — A  Disagreeable  Looking  Millionaire — A 
Wall  Street  Pointer;  His  Picture,  Antecedents  and  Mystery — His 
Geese  Always  Lay  Golden  Eggs— We  Buy  Five  Hundred  Cumber- 
land Joint  Account  on  a  "  Point ' ' — Averaging  a  Loss — How  Men 
Save  Themselves  by  Averaging — Advice  Given  to  an  Operator  in  a 
Tight  Place — "  Cumberland  not  Worth  Ten  Cents  on  the  Dollar," 
and  I  am  Long  of  it  at  80— A  Bad  Show  for  a  Profit— Keep  up  Your 
Averaging,  My  Dear  Boy. 

IHE  two  great  features  of  the  market  in 
Wall  Street  in  the  summer  of  1864,  were 
Harlem  and  gold,  both  of  which,  by  a 
singular  coincidence,  rose  to  285.  The  general 
stock  market  was  lifeless,  at  least  compared  to  the 
preceding  spring  and  to  the  summer  of  1863.  The 
situation  in  respect  to  the  conflicting  parties,  stood 
thus. 

The  bears,  owing  to  their  heavy  losses  during  the 
Morse  campaign  and  the  Harlem  rise,  were  too  de- 
moralized and  impecunious  to  become  the  assailants 
and  take  advantage  of  the  causes  which  tended  to 
produce  lower  prices. 

The  panic  of  April  18th  had  given  them  moral  en- 
couragement, though  they  had  derived  little  or  no 
pecuniary  advantage  from  it.  But  as  they  were 


AN  ARMY  WITHOUT  A  GENERAL.       375 

gathering  together  their  shattered  forces,  the  gold- 
burst  came  and  once  more  disconcerted  them. 

The  bulls,  on  the  other  hand,  who  had  been  se- 
verely crippled  by  the  same  panic,  had  their  courage 
and  money  forces  bolstered  up  by  Harlem  and  the 
gold  rise.  And  yet  they  still  lacked  something  al- 
ways essential  to  an  upward  movement,  viz.:  bull- 
leaders.  Their  army  had  no  general.  A.  G.  Jerome 
had  retired  after  the  defeat  which  he  suffered  in 
August.  1863,  on  Old  Southern,  at  the  hands  of 
Henry  Keep.  A.  W.  Morse  had  been  blown  sky- 
wards as  he  was  scaling  the  ramparts  of  Fort  Wayne. 
The  Commodore  was  engaged  in  nursing  his  invest- 
ments. Tobin  was  resting  on  his  Harlem  laurels. 
Of  the  other  chieftains,  not  one  advanced  to  cheer  on 
their  ranks  to  victory. 

The  strong  upward  movement  which  followed  the 
April  panic  was  the  natural  rebound  after  so  heavy 
a  fall,  rather  than  any  concerted  scheme  on  the  part 
of  the  bulls.  In  May,  June  and  July,  various  stocks 
had  been  taken  hold  of  in  succession  and  lifted  by 
main  strength  several  per  cent. ;  but  somehow  in  all 
these  cases,  just  as  the  lifters  were  preparing  to  reap 
the  reward  of  their  exertions,  stocks  would  suddenly 
be  depressed  as  if  by  some  unseen  power,  and  then 
all  the  bears  would  join  hands  and  execute  a  pas 
de  fascination  around  the  venerable  form  of  Uncle 
Daniel,  who,  as  the  master  of  the  ballet,  would  there- 
upon gaze  with  an  approving  smile  upon  his  nimble 
pupils. 

The  tendency  of  stocks  was  downward. 

Sultry  August  brought  with  it  the  reign  of  dullness, 
that  condition  of  things  in  the  stock-market  forcible 


376  INSIDE    LIFE    IN   WALL    STREET. 

but  somewhat  inelegantly  styled  the  "dry  rot,"  to 
which,  allusion  has  been  made  in  Chapter  VII. 

Imagine  five  hundred  men  all  standing  before  the 
pendulum  of  a  gigantic  clock,  and  ejaculating  with 
every  tick,  "  Here  she  goes,  and  there  she  goes." 
This  is  the  likeness  of  Wall  Street  in  a  dull  season. 
Stocks  move  up  one  per  cent.,  then  down  one  per 
cent.,  and  so  on  day  after  day,  and  week  after  week. 
No  orders  to  buy  or  sell  are  given  by  the  heavy 
operators ;  the  outsiders  stand  listlessly  by  and  wait 
for  the  moving  of  the  waters.  In  the  Board,  feeble 
attempts  are  made  to  create  an  excitement  in  some 
old  favorite  stock,  which  responds  lazily  to  sharp 
bidding  and  moves  up  a  notch;  but  as  soon  as  the 
bidding  ceases,  down  it  plumps  again  to  the  figure 
from  which  it  started.  Little  knots  of  speculators 
are  made  in  the  street,  to  talk  stocks  and  book  smali 
bets  on  the  course  of  the  market.  The  song  of  the 
curbstone  broker  becomes  still  and  small.  Ever  and 
anon  some  spruce  and  agile  clerk  of  one  of  the  promi- 
nent commission  houses  worms  his  way  into  these 
street  knots  and  bids  for  one  or  two  hundred  shares, 
when  deep  voices  immediately  take  up  the  note  like 
the  boom  of  the  bittern  in  some  lonely  swamp.  Then 
the  throng  of  buyers  and  sellers  roar  out  a  stave  of 
some  patriotic  song,  such  as  "Rally  round  the  flag," 
or  "In  the  prison  cell  I  sit,"  some  one  cries  out,  "Shoo 
fly,  don't  bodder  me,"  and  the  song  ceases  as  suddenly 
as  it  began.  "  The  boys  "  often  amuse  themselves  by 
playing  pranks.  A  newly  arrived  gentleman  from 
the  rural  districts,  who  is  a  looker-on  on  the  scene, 
finds  his  hat  suddenly  tipped  over  his  eyes,  or  his 
shoulder  smartly  tapped  by  one  of  the  habitues,  who 


OVER,  IN,  OUT  AND  GONE.          377 

immediately  mingles  with  the  crowd,  while  the  butt 
of  these  little  practical  jokes  is  looking  vigilantly  on 
every  side  for  his  tormentor.  A  dignified  old  veteran 
stalks  about  with  a  placard,  "For  sale  at  auction"  which 
some  mischievous  broker  has  fastened  to  his  coat-tail. 

In  dull  seasons,  the  only  thing  left  to  operators  is, 
"playing  with  stocks."  This,  it  need  not  be  re- 
marked, is  very  much  like  playing  with  fire,  for  the 
operator  is  almost  sure  to  get  burnt.  However,  as 
this  is  the  sole  remedy  for  that  restlessness,  which 
dogs  and  urges  the  speculator  on  from  behind,  like 
the  iron  goad  of  destiny,  he  gladly  avails  himself  of 
it,  even  though  he  knows  it  may  cost  him  a  pretty 
penny  in  the  way  of  losses. 

In  the  course  of  this  diversion,  it  would  be  hard 
to  mention  the  name  of  a  stock  to  which  we  did  not 
pay  our  respects,  as  "  the  Cynthia  of  the  minute." 
After  fifty  or  sixty  different  operations,  in  which  I 
had  jumped  in,  and  then  jumped  out  again,  I  found  my 
losses  in  these  transitory  enterprises,  had  amounted 
to  $22,000. 

Then  we  (the  quartette  aforesaid,)  joined  forces, 
and  gave  four  separate  orders  to  as  many  different 
brokers  in  the  Public  Board,  to  buy  one  thousand 
shares  of  North-western  Preferred,  at  the  market 
price.  The  stock  rose  three  per  cent,  under  our 
joint  purchase  of  four  thousand  shares.  Naturally 
it  was  very  gratifying  for  us  to  know  that  we  had 
sufficient  influence  to  make  North-west  rise  three 
per  cent.,  but  this  feeling  of  gratification  was  some- 
what marred,  when  the  price  fell  back  again,  entail- 
ing upon  us  a  loss  of  four  hundred  dollars  apiece. 

Then  we  tried  our  hands  at  making  those  "  quick 


378  .    INSIDE    LIFE   IN   WALL    STREET. 

turns,"  which  brokers  so  delight  in.  " Quick  turns" 
are  buying  or  selling  for  a  profit  of  a  quarter  per  cent, 
or  more.  No  returns  were  rendered  to  us  on  these 
operations,  though  our  broker  reaped  a  harvest  of 
commissions. 

All  our  little  operations  for  two  months  during  the 
summer  were  based  upon  the  most  reliable  "points," 
which  we  gathered  from  every  conceivable  source, 
with  the  greatest  assiduity.  As  the  market  was 
generally  a  declining  one  during  this  period,  we  had 
barely  saved  ourselves  from  being  thoroughly  im- 
paled on  these  points,  by  "  cutting  short  our  losses,"  in 
every  case,  excepting  one,  and  that  was  my  private 
and  individual  case,  as  will  be  seen  by  the  following 
statement. 

While  perambulating  in  Broad  Street,  in  search  of 

points,  I  met  J ,  a  stock-market  acquaintance. 

He  had  a  most  unprepossessing  countenance,  in  fact 
quite  disagreeable.  Some  would  have  called  it  sinis- 
ter in  its  expression,  but  he  was  worth  $500,000,  and 
consequently  Wall  Street  voted  him  as  good  looking 
and  agreeable.  In  society  he  was  set  down  as  fasci- 
nating. 

"Did  he  know  of  any  stock  to  make  a  turn  in? 
Just  a  flyer  of  a  thousand  shares,  good  for  one  or 
two  per  cent,  enough  to  pay  for  a  trip  to  Niagara ?" 
I  asked. 

"Well,  no!  I'm  only  this  morning  in  from  the 

country,  and  a'nt  posted ;  but  here  comes  G ,  he 

can  tell  you  something  worth  knowing,  I'll  wager." 

So  saying,  he  introduced  me  to  G ,  and  passed 

on.  I  had  often  seen  G ,  who  haunted  the  market, 

and  had  wondered  who  he  was.  He  also  had  a  very 


DROPPING   THINGS   AROUND   LOOSELY.  379 

unpleasing  face,  which  always  wore  a  fixed  Mephisto- 
phelian  smile,  commonly  known  as  the  clam-shell 
smile.  He  vainly  endeavored  to  hide  the  ravages  in- 
flicted by  twenty-five  years  of  a  speculator's  life,  by 
dyeing  his  full  beard  a  dead  black.  I  had  understood 
that  he  had  affiliations  with  several  leading  railroad 
directors.  A  second  cousin  of  his  was  said  to  be 
connected  with  the  Erie  direction,  and  his  wife's 
brother  had  relations  to  the  coal  interests.  His 
uncle  was  a  permanent  investor  in  New  York  Cen- 
tral. Then  there  was  his  grandfather,  a  venerable 
stock  operator,  who  could  ,have  been  seen  toddling 
down  two  or  three  times  a  year,  wearing  the  family 

smile.     G was  the  image  of  his  grandfather,  only 

more  so. 

As  he  had  dropped  three  or  more  fortunes  in  differ- 
ent convenient  places  around  the  street,  he  was,  and 
had  been  for  several  months,  living  on  very  short 
commons,  so  much  so  that  his  most  intimate  acquaint- 
ances alleged  that  he  never  at  this  time  was  in  the 
habit  of  taking  more  than  one  square  meal  in  a  day. 
As  to  costume,  however,  he  could  not  be  impeached, 
for  he  "traveled  on  his  style,"  and  always  found 
it  pay  to  dress.  His  toilet  was  an  important  part 
of  his  capital  in  the  trade,  which  he  worked  at. 
This  trade  was  selling  points.  Here  was  unfolded  the 
mystery  of  his  existence.  He-  sold  information;  he 
jobbed  off  secrets;  he  dealt  in  "points"  warranted  not 
to  cut  in  the  eye,  and  thus  extracted  sustenance  for 
himself  and  the  young  buzzards  which  fluttered  in 
his  domestic  nest.  He  would  put  in  his  "point" 
against  the  capital  of  some  wealthy  friend,  who,  on 
the  information  thus  furnished,  would  buy  or  sell  one 


3SO  INSIDE    LIFE   IN   WALL    STREET. 

or  more  hundred  shares  of  stock,  G having  a 

certain  interest  in  the  operation.  If  there  was  a 
profit  growing  out  of  it,  G had  a  part  of  it,  al- 
lotted to  him  as  a  remuneration  for  his  point.  If  a 
loss  occurred,  G would  give  his  note  for  his  pro- 
portion, hut  owing  to  G 's  impecuniosity  these 

notes,  of  course,  were  never  paid. 

It  will  be  readily  seen  that  G 's  geese  gener- 
ally laid  golden  eggs. 

In  some  cases  he  was  known  to  give  contradictory 
points  to  different  operators.  He  would  tell  one 
operator,  for  example,  that  Erie  was  about  to  be  put 
up;  on  this  point  two  hundred  shares  of  Erie  would 
be  bought.  Then  he  would  go  to  another  operator 
and  inform  him  that  Erie  was  about  to  be  dropped ; 
and  on  this  point,  two  hundred  shares  of  Erie  would 

be  sold  short.     Then  G "had  a  sure  thing;*' 

out  of  one  of  these  transactions  a  profit  would  cer- 
tainly accrue. 

G looked  me  steadily  in  the  face  as  if  he  would 

take  the  latitude  and  longitude  of  my  bank  account. 
Then  he  seemed  suddenly  to  grow  to  me  like  a  limpet 
to  a  rock.  He  hooked  his  arm  in  mine,  jerked  his 
head  in  a  southerly  direction,  and  walking  rapidly 
round  the  corner  of  Exchange  Place,  passed  through 
several  winding  passages  into  the  tunnel  leading  to 
the  Regular  Board,  then  halted  to  breathe  something 
in  a  husky  whisper  into  the  ear  of  a  small,  but  very 
well-groomed  broker,  passed  down  stairs  into  Beaver 
Street,  stalked  into  Delmonico's  and  sat  down  op- 
posite to  me  at  a  little  table.  Then  calling  for 
some  rare,  delicious  beverage,  such  as  can  be  got 
only  at  that  temple  of  Bacchus,  he  gazed  at  me,  try- 


SOMETHING  ABOUT  COAL.          381 

ing  very  hard  to  infuse  into  his  smile,  something  at 
once  plaintive  and  affectionate. 

Mysterious  silence !  G was  evidently  pregnant 

and  laboring  with  some  momentous  secret.  Suddenly 
his  left  eyelid  drooped,  then  closed  very  tight;  he 
bent  over  and  whispered  in  my  ear: 

"Do  you  want  to  make  some  money?  Of  course 
you  do.  I'll  put  up  a  job  for  you,  if  you  say  so." 

"Yes.     What's  your  job?"  replied  I. 

"  Buy  five  hundred  shares  of .  I'll  tell  you  the 

stock  if  you  say  you'll  do  it.  Joint  account,  profit 
and  loss,  you  and  I." 

"All  right!     What's  the  stock?"  rejoined  I. 

Thereupon  he  delivered  a  brief  and  impressive 
dissertation  on  the  value  of  coal-stocks  in  general, 
and  of  this  stock  in  particular;  and,  looking  all 
around  him,  to  assure  himself  that  no  listener  was 
near,  he  pronounced  the  word  "Cumberland!"  Hav- 
ing paused  for  a  moment,  to  see  the  effect  produced 
by  this  communication,  he  winked  again  very  hard 
and  continued :  "  Saw  a  director  this  morning.  Slope 
mine;  sale  soon  to  be  consummated.  Cash  dividend, 
ten  per  cent.  Bet  you  twenty-five  dollars  (taking 
out  a  very  lean  pocket-book  as  if  he  was  eager  to 
plank  down  his  money)  that  Cumberland  sells  at  par 
in  thirty  days.  Don't  wait,  buy  five  hundred  right 
away." 

In  fifteen  minutes  after  this  interview,  five  hun- 
dred shares  of  Cumberland  were  registered  on  the 
stock-book  of  N &  Co.,  as  held  for  the  joint  ac- 
count of  G and  myself.  It  cost  about  80.  In 

the  course  of  the  next  week  it  had  fallen  five  per 
cent.  The  loss  on  it  was  twenty-five  hundred  dol- 


•$82  INSIDE   LIFE    IN   WALL    STREET. 

lars.  The  next  best  thing  to  cutting  short  a  loss,  is 
"averaging"  it  by  buying  more  stock  at  a  lower 
price. 

G ,  who  turned  up  when  Cumberland  was  selling 

at  74,  reported  that  the  sale  of  the  Slope  mine  had 
been  delayed,  and  that  the  stock  had  been  dropped 
for  the  purpose  of  "  Scooping  a  few  more  shorts."  He 
advised  that  we  keep  our  position,  and  "average," 
by  buying  more  stock  at  the  decline.  We  aver- 
aged, by  buying  five  hundred  more  Cumberland  at 
about  74. 

This  averaging  or  buying  separate  lots  successively 
as  the  price  declines,  when  an  operator  is  saddled  with 
stock  at  a  high  price,  is  all  very  well  if  stocks  soon 
recover  themselves,  or  if  the  buyer's  margins  are 
sufficiently  ample  to  enable  him  to  keep  buying  until 
the  tide  turns.  Should  the  stock,  however,  fall  fifty 
per  cent.,  the  operator  who  starts  by  buying  five  hun- 
dred shares,  and  repeats  the  purchase  at  every  five 
per  cent,  decline,  will  find  himself  at  last  loaded  with 
five  thousand  five  hundred  shares,  at  an  average  loss 
of  twenty-five  per  cent.,  or  about  $125,000,  rather  a 
heavy  burden  for  any  one  but  a  millionaire.  Still, 
very  many  of  the  Wall  Street  men  follow  this  plan 
with  great  success  so  long  as  they  gauge  it  according 
to  their  means. 

M ,  a  noted  Wall  Street  man,  has  been  heard 

to  boast  that  he  never  sold  a  stock  at  a  loss  during 
the  past  ten  years.  He  bought  one  hundred  shares 
of  Erie  at  128,  during  the  Morse  rise,  and  bought 
another  hundred  at  95,  and  after  that  at  every  ten 
per  cent,  decline,  repeated  his  purchase  till  April, 
1865,  when  Erie  after  touching  42,  rose  again  to  98. 


CUMBERLAND    ON    THE    DOWN    GRADE.  383 

His  average  was  79,  and  after  nearly  eighteen  months, 
his  stubbornness  was  rewarded  with  a  profit.  The 
same  individual,  in  1868,  bought  one  hundred  Erie  at 
80,  and  now  holds  five  hundred  shares  which  aver- 
ages him  55.  He  has  waited  two  years  for  the  tide 
to  turn,  and  we  venture  to  predict  that  he  will  yet 
sell  his  Erie  at  a  handsome  profit. 

To  resume  our  story.  Cumberland  continued  fall- 
ing, and  we  (G and  I,)  continued  averaging. 

G always  had  some  plausible  story  to  tell  about 

the  occasion  of  each  five  per  cent,  decline.  When 
Cumberland  reached  56,  we  held  two  thousand  shares 
which  brought  us  in  for  a  loss  of  more  than  $30,000. 

By  this  time  G 's  point  had  vanished,  without 

leaving  a  residuum,  and  he  about  the  same  time  was 
missed  from  Wall  Street.  Nothing  was  left  to  his 
partner  but  to  keep  averaging,  or  sell  out,  and 
pocket  his  loss. 

When  a  man  is  in  danger  of  heavy  loss  upon  a 
purchase,  it  is  remarkable  how  lavish  his  friends  are 
of  advice  and  information  of  a  disagreeable  nature. 
So  it  happened  during  the  Cumberland  drop  to  56. 
One  of  the  first  men  I  met  was  a  prominent  broker 
of  the  "party,"  for  there  was  a  "party"  in  the  stock. 
That  mysterious  word,  "  party."  Somehow  there  al- 
ways seems  to  be  a  "party"  in  every  stock  on  the 
list.  "  Don't  hold  a  share  of  it,"  said  he,  "the  party 
are  getting  out  of  it  as  fast  as  they  can,  and  in  six 
weeks  the  whole  capital  stock  will  be  knocking 
around  the  street  dear  at  40." 

The  next  man  I  met  was  an  old  capitalist,  who  had 
been  a  dealer  for  twenty  years  in  Cumberland.  When 
I  said  "  Cumberland "  to  him,  he  pranced  and  cur- 


384  INSIDE    LIFE   IN   WALL   STREET. 

vetted,  metaphorically  speaking,  like  an  aged  war- 
horse  at  the  sound  of  a  trumpet. 

"  Cumberland  ?"  cried  he. 

"  How  much  is  it  worth  ?"  inquired  I. 

"  Well,  about  ten  cents  on  the  dollar.  Dividends ! 
it  never  has  and  never  will  pay  a  dividend.  We 
made  up  a  party  and  bought  nearly  all  of  it  at  five 
cents  on  the  dollar,  five  or  six  years  ago,  and  then 
subscribed  five  per  cent,  as  a  working  capital.  We 
tried  to  work  the  mines,  but  it  was  no  go.  We 
lost  the  whole  of  our  working  capital,  $250,000, 
and  then  sold  out  our  stock  at  five,  the  price  we  paid 
for  it." 

The  advice  given  by  the  prominent  broker,  and 
the  information  elicited  from  the  capitalist,  were  not 
calculated  to  give  nerve  to  a  man  who  held  Cumber- 
land at  80. 

And  yet  I  stood  up  and  prepared  myself  to  con- 
tinue my  programme. 

Dull  seasons  in  the  stock-market  are  always  the 
precursors  of  some  marked  change  one  way  or  the 
other.  If  stocks  have  unduly  risen,  a  dull  time  pre- 
cedes a  fall;  if  they  have  been  unduly  depressed,  it 
precedes  a  rise.  And  so  it  fell  out.  As  August 
drew  near  its  close,  there  were  signs  and  omens  of 
approaching  change. 

Before  telling  how  I  came  out  of  Cumberland,  it 
will  be  proper  here  to  switch  off  our  stock  train  into 
the  track  of  gold.  As  I  have  before  mentioned,  it 
was  not  till  August,  1864,  that  a  separate  place  was 
assigned  to  the  dealings  in  this  commodity. 

Soon  after  the  repressive  Congressional  act  was  re- 
pealed, Gilpin's  reading  room,  on  the  corner  of  Wil- 


POWERLESS   LEGAL   ENACTMENTS.  385 

liam  Street  and  Exchange  Place,  was  the  place  of 
meeting  first  selected  by  the  gold  crowd.  Here  com- 
menced an  era  of  speculation  in  the  precious  metal, 
which  was  to  last  six  months,  and  was  marked  by 
greater  vicissitudes  in  fortune,  than  even  the  stock 
speculation,  which  was  its  forerunner. 

It  should  be  noticed  here,  that  enormous  trans- 
actions were  privately  made  every  day,  during  the 
operation  of  the  act  against  dealing  in  gold  on  con- 
tracts, proving  how  little  power  legal  enactments  have 
over  a  trade  which  promises  great  profits. 


CHAPTER  XXIV. 
THE  BREAK  IN  GOLD— PANIC-BIRDS. 

The    Gold   Fire-balloon— Vibrations  from  the    Cannon's   Roar— The 
Gathering  of  the  Clans  in  the  Gold-room — Desperate  Speculators  at 

the  Front — Portraits  of  Operators — N Bulls  Gold,  and  We  Bull 

It — A  Loss,  first  on  the  Long  and  then  on  the  Short  Side — A  Call 
for  More  Margin,  and  an  Examination  of  our  Bubble-company  Assets 
—A  Visit  to  the  Den  of  the  Bloated  Spider— The  Clergyman  and 
Farmer  Looking  After  Their  Investment— They  Find  the  House 
"Swept  and  Garnished" — We  Meet  the  "Corpulent  Gentleman" 
in  a  Picture  Gallery — The  Interview  and  its  Result — The  Fall  of 
Atlanta,  and  Gold  on  the  Rampage  Downwards — Panic-birds  at 
Their  Feast — A  Portrait  of  the  "  Stormy  Petrels" — Buy  Cumber- 
land— I  "  Average  "  out  of  My  Loss. 

>ROM  July  2d  till  August  30th,  1864,  gold 
hung  from  250  to  280,  like  a  monstrous  fire- 
balloon  by  the  side  of  a  thunder-cloud.  Not 
a  few  daring  aeronauts  sailed  over  the  massed  black- 
ness, which  darkened  the  financial  sky,  as  if  they 
would  garner  its  thunder-bolts  in  sheaves. 

Low  mutterings  already  foreboded  a  storm  which 
would  either  drive  gold  before  it  to  500  and  depress 
greenbacks  to  twenty  cents  on  the  dollar,  staggering 
if  not  prostrating  the  shaky  system  of  Government 
credit,  or  which  should  hurl  gold  down  to  the"  neigh- 
borhood of  par  amid  the  ruin  of  American  commerce 
and  all  its  dependencies. 

On  the  James  River  two  hosts  lay  watching  each 
other  sullenly  through  the  embrasures  of  mighty 


GOING   UP   IN   THE    GOLD   BALLOON.  387 

earth-moles,  or  behind  sand  bags,  or  couched  in 
trenches  through  many  a  circling  league;  Sheridan 
and  Early  were  playing  a  bloody  game  of  tag,  up  and 
down  the  Shenandoah,  while  every  one  was  listening 
to  catch  the  sound  of  the  cannon  of  the  army  of  the 
Tennessee,  as  it  swept  up  to  the  gates  of  the  confed- 
eracy. Ever  and  anon  the  deep  booming  of  the 
guns  of  Sherman  as  his  long  deep  columns  rolled  past 
the  blood-stained  heights  of  Kenesaw,  on !  on !  across 
the  Chattahoochie,  awoke  dismal  echoes  in  the  hearts 
of  the  gold-bulls.  And  now  Atlanta  was  beleaguered. 

The  dull  season  was  over  at  last,  and  the  carnival 
of  speculation  had  commenced.  Even  on  tame  days 
the  price  vibrated  two  or  three  per  cent,  in  an  hour, 
and  there  were  not  many  tame  days.  Here  was  the 
swiftest  chance  to  make  or  lose  a  fortune  in  a  day. 
Stocks  were  nothing  to  it.  The  wildest  and  most  des- 
perate speculators  from  every  side  flocked  into  the 
new  gold  room,  a  motley  multitude  of  well  dressed  bar- 
barians with  seamed  faces  and  cavernous  eyes,  scream- 
ing and  brandishing  their  arms  from  morning  till 
night.  •  Their  voices  were  like  that  of  Stentor,  their 
lungs  like  iron,  their  fingers  seemed  fairly  electrified 
with  charges  from  the  ticking  telegraph. 

Many  of  the  operators  in  the  crowd  went  in  for 
short  turns,  buying  and  selling  millions  in  a  day. 
Among  these  was  a  short  thick-set  Missourian,  named 
C .  He  stood  on  a  chair  in  one  corner,  register- 
ing his  purchases  and  sales  in  a  little  book  which  he 
constantly  held  in  his  hands.  The  heavy  break  three 
weeks  after,  clipped  his  audacious  wings,  and  he  dis- 
appeared from  the  scene.  High  above  the  din  occa- 
sionally could  be  heard  the  hollow  bull-bison  roar  of 


388  INSIDE    LIFE   IN   WALL    STREET. 

D.  H ,  whose  face  wedged  between  the  shoulders 

of  the  crowd,  resembled  that  of  a  blonde  and  apo- 
plectic bull-dog. 

Another  man  who  operated  on  short  turns  for  enor- 
mous amounts,  was  S ,  who  might  have  been  a 

member  of  the  Lydia  Thompson  troupe,  with  his  hair 
of  pale  tow,  and  his  eyes  of  the  hue  and  sharpness 
of  a  newly  polished  axe. 

Later  in  the  day,  a  conspicuously  tall  and  ugly  man 
might  have  been  seen,  generally  holding  in  his  hand 
a  crumpled  paper,  containing  the  latest  news  from 

the  Southern  Confederacy.  It  was  C ,  and  when 

he  bid  for  $100,000  gold,  the  price  always  stiffened. 
TThen  the  crowd  would  be  crazy  to  buy.  Lockwood's 
man  would  sell  them  half  a  million  or  so,  and  the 
excitement  would  subside. 

Fresh  news  from  the  front  "Johnston  driven  back 
by  Sherman."  Now,  everybody  wanted  to  sell,  and 
gold  would  drop  off  two  or  three  per  cent.  These 
scenes  were  renewed  at  the  Evening  Exchange,  and 
in  the  bar-room  of  the  Fifth  Avenue  Hotel ;  telegrams 
flew  around  like  snow-flakes,  while  gold  changed  hands 
by  the  million. 

Late  in  August  the  bankers  held  gold  in  a  firm 
grip  at  260.  Large  sums  had  been  locked  up,  and  as 
enormous  short  sales  had  been  made  by  the  bears  on 
the  faith  of  better  military  prospects,  gold  could 
be  readily  carried  by  loaning  it  to  the  short  sellers. 
A  serious  disaster  to  any  one  of  the  Union  armies 
would  have  driven  the  price  up  to  300.  And  in  the 
absence  of  any  news,  the  fears  of  the  bears  would 
have  induced  them  to  bid  it  up  to  275. 

N ,  our  buoyant  broker,  had  never  abated  one 


GOLDEN   TEARS.  389 

jot  of  his  confidence  of  the  ultimate  rise  of  gold  to 
$00.  He  talked  it  up  at  lunch-time  ;  he  bought  it  in 
magnificent  lots  in  the  gold  room,  in  fact  he  bulled 
it  always  and  everywhere.  Hence  it  was  that  in 
company  with  L I  made  a  venture  at  that  peril- 
ous height.  I  bought  $100,000  at  260;  in  two  days 
I  cut  short  my  loss  by  selling  at  250.  Ten  thousand 
out  on  this  flyer.  The  price  stayed  not  long  at  250. 
Suddenly  on  the  last  day  of  August,  the  grasp  of  the 
gold  bulls  was  paralyzed,  and  the  price  fell  with  a  dull 
thud  to  233. 

What  was  the  matter? 

Trouble  in  the  secession  camp.  The  underground 
telegraph  kept  up  a  constant  click.  Little  groups  of 
rebel  sympathizers,  scowling  and  glum,  stood  on  the 
side-walk,  while  the  looks  of  those  who  were  long  of 
gold  disclosed  their  secret  consternation. 

If  Sherman  took  Atlanta,  gold  would  fall  fifty  per 

cent.  L and  myself  reversed  our  engines  and  sold 

$100,000  gold  at  235.  This  time  we  clung  to  our 
loss  till  the  price  had  risen  to  250.  Then  we  cov- 
ered. Twenty-five  thousand  dollars  gone  in  two 
weeks !  Besides  these  losses  on  gold,  I  stood  minus 
$17,000  on  Hudson  and  North-west  Preferred,  and 
$30,000  on  Cumberland ! 

N 's  dome-like  brow  was  over-clouded.  He 

called  us  into  his  private  office,  and  told  us  that  we 
must  margin  up  on  our  stocks,  twenty  per  cent. 

Things  began  to  have  a  mixed  look.  We  must 
examine  our  assets. 

Most  of  our  assets,  outside  of  margins  in  our 
broker's  hands,  were  in  the  compact  and  permanent 
shape  of  certificates  of  mining  companies.  What 
24 


390  INSIDE    LIFE    IN   WALL    STKEET. 

could  they  be  sold  for?  We  threw  them  upon  the 
market.  For  Gregory  Consolidated,  we  had  never  a 
bid.  Gunnel  Gold,  we  sold,  wonderful  to  relate,  for 
forty  per  cent,  less  than  we  had  given  for  it. 

As  for  "The  Alligator  Bayou  Salt  Company,"  "The 
Big  Mountain  Iron  Company,"  "The  Black  Valley 
Coal  Company,"  and  "  The  Angels'  Rest  Quicksilver 
Company,"  there  were  no  quotations. 

We  next  sought  out  the  corpulent  gentleman,  with 
gold-bowed  spectacles,  who  had  succeeded  in  placing 
our  money,  at  least  $25,000  of  it^n  the  securities 
last  named.  His  office  was  near  by,  just  round  the 

corner  from  the  Regular  Board  of  Brokers.     As  L 

and  myself  approached  it,  we  saw  a  couple  of  coun- 
trymen deeply  engaged  in  deciphering  two  placards, 
one  of  which  hung  in  the  window,  and  announced 
'that  these  offices  were  To  Let!  The  other  placard 
informed  anxious  inquirers  that  the  office  of  various 
mining  companies,  therein  named,  was  removed  to 

—  William  Street,  Room  No.  28.  A  look  of  quiz- 
zical wonder  sat  on  the  faces  of  the  two  men,  who 
were  studying  the  placards.  They  had  come  to  the 
city  to  see  how  their  investments  were  doing,  and  to 
inquire  for  dividends.  The  taller  of  the  two  was 
evidently  a  clergyman.  He  seemed  to  take  in  the 
situation  with  remarkable  rapidity,  and  after  staring 
into  the  windows  meekly,  for  a  moment,  turned  up 
the  street,  and  walked  away  as  if  he  were  shaking 
the  dust  off  his  feet.  The  other,  who  was  apparently 
an  agriculturist,  had  a  weather-beaten  face,  a  country 
made  coat,  and  a  blue  cotton  umbrella.  After  read- 
ing the  placard  on  the  door,  he  aired  his  eye  at  the 
keyhole,  then  went  into  the  street,  and  gazed  into 


LOOKING   AFTER    OUR    INVESTMENTS.  391 

the  window,  saw  that  the  office  was  swept  and  gar- 
nished, cast  a  searching  glance  about  him,  as  if  he 
were  hunting  for  specimens  of  gold  quartz,  and  then, 
giving  a  prolonged  whistle,  ejaculated,  "Sloped,  by 
gosh!" 

We  left  the  rustic  ruminating  upon  the  uncertainty 

of  mining  investments,  and  wended  our  way  to 

William  Street,  Room  No.  28,  fourth  floor.  We  found 
this  apartment  locked  and  cob-webs  over  the  key- 
hole. By  removing  these  obstructions,  and  looking 
through  the  aperture,  we  could  only  discover  a  pile 
of  dusty  stock  certificate  books  and  a  small  heap  of 
stones  on  the  floor,  which  we  recognized  with  some 
difficulty,  as  being  those  remarkably  rich  samples  and 
specimens  of  quartz,  sulphurets,  etc. 

We  shed  no  tears,  yet  we  had  "  thoughts  too  deep 
for  tears,"  as  we  walked  homeward  that  night. 
Nothing  was  left  to  us  except  to  find  the  corpulent 
gentleman  with  gold-bowed  spectacles,  and  see  if  he 
would  take  our  certificates  off  our  hands,  even  at  ten 

cents  on  the  dollar ;  "  failing  in  that,"  remarked  L 

"  we  can  resort  to  arms  and  punch  the  head  of  the 
author  of  our  woes." 

On  the  way  home,  we  happened  to  step  into  a  pic- 
ture sales-room  on  Broadway.  The  paintings  in  this 
establishment  were  advertised  to  be  the  collection  of 
a  gentleman  just  about  to  start  for  Europe,  and  some 
of  his  pictures  were  fondly  supposed  to  be  works  of 
the  old  masters.  They  embraced  the  usual  themes  to 
which  artists  are  prone  to  devote  themselves,  viz.,  a 
certain  number  of  cherubs  rather  beef-faced,  and  run 
to  fat ;  several  portraits  of  women  with  very  high  color, 
staring  eyes  and  Roman  noses;  two  or  three  nude 


392  INSIDE    LIFE    IN   WALL   STREET. 

figures  after  Greuze,  a  historical  picture,  the  battle  of 
Brandywine,  besides  landscapes,  etc.,  etc.,  all  newly 
varnished  and  in  bright  gilt  frames,  made  to  order. 

While  contemplating  the  beauties,  and  endeavoring 
to  penetrate  the  "  clear  obscurity  "  of  these  works  of 
art,  we  became  conscious  that  some  one  else  had 
joined  us,  and  on  casting  our  eyes  around,  saw  the 
very  man  we  were  in  search  of,  breathing  asthmati- 
cally,  and  standing  like  some  gigantic  owl  directly  in 
front  of  a  very  stout  Magdalen,  and  feasting  his  eyes 
upon  it. 

Two  hands  clapped  upon  his  fat  shoulders  and  two 
pair  of  wrathful  eyes  startled  him  nearly  out  of  his 
artistic  trance.  He  stepped  back  an  instant,  then  re- 
covering himself,  grasped  our  hands  affectionately 
and  inquired  after  our  healths  with  truly  paternal 
solicitude. 

"  A  soft  answer  turneth  away  wrath."  We  were 
taken  aback  by  so  much  courtesy,  but  regained  our- 
selves and  cross-examined  him  on  the  subject  of  our 
investments,  and  begged  to  know  if  he  would  take 
them  off  our  hands  at  a  discount. 

"Well!  no!"  replied  he,  "I  am  not  buying  now." 

"What's  the  matter  with  the  securities?"  inquired 
we. 

"  Antimony  is  the  matter ;  sulphur  is  the  matter," 
was  his  reply.  "  You  see  that  our  gold  ores  are  very 
rich,  but  the  gold  is  mixed  up  with  antimony  and  sul- 
phur, and  it  can't  be  extracted  so  as  to  pay.  But 
this  problem  of  separating  the  gold  from  the  anti- 
mony and  sulphur  will  be  solved  before  long,  then 
you'll  wake  up  and  find  yourselves  rich,  etc.,  etc." 

Although   we   thought   it    extremely    improbable 


FALL  OF  ATLANTA  AND  GOLD.        393 

that  this  problem  would  be  solved  in  our  day,  yet 
the  corpulent  gentleman  was  so  exquisitely  bland, 
and  ready  with  his  explanations,  that  from  indigna- 
tion, we  relapsed  into  uncomplaining  sorrow,  which 
in  turn  passed  into  forgetfulness,  and  in  three  days 
we  had  ceased  to  call  to  mind  how  much  money  we 
had  sunk  in  bubble-companies. 

It  is  a  remarkable  trait  in  human  nature,  this  fa- 
cility with  which  the  outside  public  forget  how  they 
have  been  bamboozled  by  these  bogus  companies. 
Perhaps  they  do  not  really  forget,  but  they  cer- 
tainly seem  to  forget  how  much  money  they  have 
thrown  away  in  these  investments.  It  may  be,  that 
their  vanity  keeps  them  from  disclosing  how  they 
have  been  taken  in. 

Meanwhile  gold  had  risen  to  254,  and  was  scarce 
for  delivery.  It  was  the  news  that  General  Hood 
was  sending  his  advance  guard  to  Columbus,  which 
had  thrown  gold  to  233 ;  it  was  the  absence  of  any 
news,  which  had  driven  the  price  back  to  254. 

One  hot  afternoon,  at  four  o'clock,  early  in  Septem- 
ber, the  gold  dealers  emerged  from  their  den,  and 
stood  on  the  sidewalk,  in  a  compact  and  almost  silent 
group.  Something  hung  over  the  market.  The  op- 
erators stood  staring  at  each  other ;  not  a  bid  or  an 
offer  was  made.  All  at  once  a  burly  man  appeared 
on  the  edge  of  the  crowd,  and  bid  for  fifty  thousand 
gold,  in  a  loud  voice.  The  price  grew  firmer  when 
two  or  three  men  were  observed  selling  quietly  large 
amounts,  and  then  the  price  sagged  to  250. 

There  was  news  in  the  market!  It  must  be  from 
Atlanta ! 

That  evening  every  gold-man  was  at  his  post,  long 


394  INSIDE    LIFE   IN   WALL    STREET. 

before  the  appointed  hour.  The  bulls  were  prepared 
to  bolster  up  the  tottering  column ;  and  the  bears,  to 
make  up  some  of  their  losses  incurred  during  the 
past  summer;  for  late  that  afternoon,  the  news  had 
been  flashed  over  the  wires  that  Atlanta  had  fallen. 
The  Evening  Exchange  now  was  like  a  blacksmith's 
shop.  Gold  fell  to  243,  under  the  hammers  of  fifty 
operators,  all  striking  at  once.  But  just  as  this  anvil 
chorus  was  swelling  into  the  roar  of  a  panic,  the 
heavy  holders  of  gold  girded  up  their  loins,  and  ar- 
rested, by  sharp  bids,  the  downward  movement. 
Their  only  course  now  was  to  let  the  market  down 
as  easily  as  possible,  and  stave  off  a  panic  until  they 
could  unload. 

This  course  they  followed  for  two  weeks,  selling  all 
they  could  secretly,  and  bidding  up  the  market  openly. 
Once  or  twice  the  price  broke  away  from  them,  when 
gold  would  fall  in  a  semi-panic,  fifteen  or  twenty 
per  cent,  in  an  hour;  but  each  time  that  it  did  so, 
they  stepped  into  the  gap,  and  ran  up  the  price  again, 
"scooping"  many  a  bear  just  as  he  was  stretching 
his  paws  for  the  profit,  which  he  thought  he  had  in 
his  grasp.  When  at  last  they  had  sold  out,  though 
at  a  heavy  loss,  they  let  the  price  go,  and  down  it 
dropped,  amid  the  wildest  excitement,  to  187. 

Our  profits  in  the  great  gold  break  will  be  re- 
counted in  the  following  chapter. 

We  now  return  to  our  "averaged  Cumberland." 

While  gold  was  flying  wildly  about,  oscillating  in 
long  arcs  towards  200,  Cumberland  all  at  once  sprang 
in  a  day  back  to  68,  and  a  great  mass  of  stock  was 
hurled  upon  the  market.  The  ring  had  during  the 
dull  season  taken  a  great  number  of  short  contracts 


PANIC   BIKDS.  395 

and  then  twisted  them  by  bidding  up  the  stock. 
But  the  fifteen  thousand  shares  which  they  sold  upon 
the  rise,  soon  carried  the  price  back  to  60.  Here  it 
stuck  for  two  weeks.  Stocks  which  had  been  tending 
downwards  for  five  months  had  received  a  fresh  im- 
petus in  the  same  direction,  from  gold  as  it  fell. 

The  6th  of  October  following  came  a  panic  which 
carried  Cumberland  to  41.  On  that  day  I  made  the 
acquaintance  of  one  of  that  class  of  stock-operators 
whom  we  shall  designate  as  panic-birds.  These  men 
are  the  stormy  petrels  of  Wall  Street.  They  are 
never  seen  in  the  market  when  everything  is  bright 
and  buoyant,  but  let  a  tempest  breed  there  and  when 
stocks  are  going  down  by  the  run,  they  flock  to  the 
scene  of  disaster,  prepared  to  take  advantage  of  it  by 
buying  stocks  at  low  prices.  Any  one  who  has  passed 
through  panics  will  remember  those  strange  faces 
standing  near  where  the  contest  is  raging,  and  quietly 
giving  their  orders. 

Who  are  they,  and  where  do  they  come  from? 
All  of  them  are  veterans  of  the  market,  who  have 
learned  by  sad  experience,  that  the  only  way  to  make 
money  in  stocks  is  to  buy  when  everybody  else  is 
selling,  that  is  during  panics.  Some  come  from  the 
country,  stay  over  one  train  and  then  depart,  loaded 
with  securities  bought  at  a  low  price,  and  all  of  them 
take  their  flight  the  moment  stocks  turn  and  react 
upwards.  One  of  these  veterans  has  seen  twenty 
panics  with  his  own  eyes,  and  boasts  that  he  has 
made  his  fortune  of  $200,000  by  never  buying  except 
in  those  seasons. 

F.  S was  a  type  of  this  class.  I  saw  him  for 

the  first  time,  during  the  October  panic  of  1857. 


396  INSIDE    LIFE  IN  WALL    STREET. 

Then  lie  disappeared  from  view  for  more  than  three 
years,  turning  up  again  in  April,  1861,  after  the  bom- 
bardment of  Fort  Sumter.  In  July,  1862,  in  May 
and  September,  1863,  on  April  18th,  1864,  in  the  gold 
panic  just  described,  and  finally  on  October  6th,  fol- 
lowing, he  was  always  on  the  spot,  not  one  minute 
too  late  to  see  prices  reach  the  bottom  of  the  grade. 

A  singular  looking  man.  His  mould  was  of  the 
herculean  pattern,  and  he  turned  the  scale  at  sixteen 
stone  two  pounds.  His  face  was  like  a  tame  eagle's, 
carved  out  of  red  oak;  his  hair  was  cut  fighting  fash- 
ion, as  if  he  wished  to  keep  himself  in  constant  train- 
ing, to  cope  with  the  bruisers  of  the  stock-market, 
and  while  brokers  were  shrieking  as  the  prices  fell, 
he  would  stand  very  firm  on  his  legs  with  his  square 
solid  set  head  cocked  on  one  side,  puffing  firmly  at  a 
regalia  as  long  as  a  small  bowsprit. 

I  stood  beside  him  on  a  mound  of  dust  in  Broad 
Street,  and  being  in  a  fever  of  anxiety,  such  as  is 
usually  brought  on  by  staring  at  a  loss  which  threat- 
ens to  fall  on  one,  sought  to  relieve  myself  by  asking 
his  opinion  about  the  market.  He  said  nothing  for 
a  moment,  then  turning  his  head  put  his  fat  hand 
to  his  mouth  and  gurgled  into  my  ear :  "  Buy  Cum- 
berland." Our  account  stood  us  out  something 
over  eighty  thousand  dollars,  and  now  it  was  "play 
or  pay." 

Thanks  to  my  short  gold  operations,  to  be  here- 
after described,  I  could  buy  one  thousand  Cumber- 
land for  cash,  at  from  42  to  45,  and  two  thousand 
shares  more  on  a  margin  at  46-47.  In  three  days 
it  rose  to  59,  and  I  was  enabled  to  unload  for  a 
trifling  loss. 


A   NEW   ELEMENT   IN    SPECULATION.  397 

A  new  campaign  was  now  opening  in  gold,  but  be- 
fore pursuing  that  jagged,  serrated  line  of  financial 
history,  by  which  may  be  traced  as  on  a  many  colored 
chart  of  alternate  mountain  peaks  and  lowland  flats, 
the  rising  and  sinking  fortunes  of  the  gold  men,  let 
us  turn  aside  for  a  chapter  to  notice  the  speculation 
in  something  more  substantial  and  staple  than  stocks ; 
a  speculation  which  sympathized  with  that  in  gold, 
moving  up  and  down  in  lines  parallel  to  it. 


CHAPTER  XXV. 
PIGS  OF  GOLD  IN  A  CORNER. 

The  Rise  in  New  Mess — The  Pork  Trade — Its  Magnitude  and  Seat — 
A  Village  Built  of  Hogs — The  Movements  of  the  Article — Corner- 
ing the  Packed  Pigs — I  Make  $10,000  in  Cotton  and  then  Slip  into 
Pork  Barrels — Au  Evening  Lecture  on  Provisions,  etc.,  at  the  Fifth 
Avenue  Hotel— The  Pork  Corner  of  July  1864— Who  Made  It?— My 
First  Visit  to  the  Corn  Exchange,  and  What  I  Saw  There — A  Crowd 
of  Porkists — The  Retired  Pirate  Buys  a  Thousand  Barrels  at  47 — 
Panic  on  the  Produce  Exchange — I  Sell  a  Call,  Buy  a  Call,  and 
Make  $59,000  on  One,  and  Lose  $6,000  on  the  Other— Multiplying 
$500  by  $100. 

'0  one  connected  with  the  agricultural  inter- 
ests, more  especially  with  that  branch  which 
is  concerned  in  the  raising  and  fattening  of 
swine,  will  fail  to  remember  the  great  rise  in  pork 
which  took  place  in  1864.  This  article  in  the  provi- 
sion line,  so  useful  in  regulating  our  foreign  ex- 
changes, and  so  sweet  to  the  palate  of  those  who  de- 
light in  the  dish  popularly  known  as  pork  and  beans, 
had  risen  from  nine  dollars  per  barrel  in  1861,  to  fifty 
three  dollars  per  barrel  in  July  1864.  If  the  deli- 
ciousness  of  a  viand  is  proportioned  to  its  price,  then, 
indeed,  was  pork  a  delicious  viand.  Had  one  of  the 
old  Roman  epicures  survived  till  1864,  he  would 
doubtless  have  mingled  pork  with  the  peacocks" 
brains,  and  ostriches'  tongues,  which  gave  zest  to  his 
banquets. 


MAGNITUDE  OF  THE  PORK  TRADE.      399 

Few,  who  have  not  visited  the  Western  States,  will 
be  able  to  estimate  the  extent  of  the  business  done 
in  this  commodity. 

"  This  is  a  great  country,"  remarked  H ,  a  New 

York  merchant,  one  day  as  we  were  traveling  to- 
gether with  our  faces  turned  towards  the  setting  sun. 

The  place  where  this  trite  observation  was  made, 
was  a  small  town  on  the  western  bank  of  the  Missis- 
sippi ;  the  time  was  the  dead  of  winter  in  1863,  and 
the  occasion  of  it  was  simply  pork,  or  as  it  is  called 
among  the  killers  and  packers,  hog.  We  walked  up 
to  the  village  hotel  between  hog,  we  stepped  over 
hog.  Hecatombs  of  hog  were  piled  up  on  every 
side,  in  stacks,  in  pyramids,  in  mountains.  It  met  us 
at  breakfast,  dinner  and  tea,  fried,  baked,  boiled  and 
stewed.  From  our  chamber  window  we  overlooked  a 
wide  expanse  of  country,  dotted  with  droves  of  hogs, 
and  in  great  pens  in  the  village,  thousands  of  hogs  were 
squealing,  grunting,  piling  on,  and  suffocating  each 
other  in  search  of  warmth  (for  the  mercury  stood  five 
degrees  below  zero)  of  which  last  fact,  (the  piling,) 
we  were  notified  by  a  hoarse  voice  calling  out  in  the 
hall  of  the  floor  where  we  were  sleeping  that  night: 
"  John  Hackerberry,  your  hog  are  piling !  Turn  out 
and  look  arter  'em ! " 

In  this  way  we  got  our  first  ideas  respecting  the 
magnitude  of  the  pork  trade. 

The  harvest  of  the  pork-raiser  is  in  the  winter. 
From  December  till  April  the  carcasses  are  forwarded 
to  the  cities  of  Chicago,  Cincinnati  and  New  York  etc., 
to  be  packed  in  barrels.  The  packed  pork'  continues 
to  come  to  New  York  from  the  West  till  July,  after 
which  there  are  small  arrivals  till  the  ensuing  winter. 


400  INSIDE    LIFE   IN   WALL    STREET. 

After  July  the  regular  cornering  season  commences, 
for  corners  are  engineered  in  pork  as  well  as  in  stocks. 
The  number  of  barrels  of  pork  on  store  in  New  York 
is  accurately  known.  This  is  an  important  fact  enter- 
ing into  the  calculations  of  ambitious  provision  deal- 
ers, when  they  plan  a  corner  in  the  article,  since  a 
new  issue  of  pork  cannot  be  made  by  those  who  are 
seeking  to  break  down  the  corner,  by  throwing  a  fresh 
supply  upon  the  market,  as  bearish  railroad  directors 
are  wont  to  do  in  stocks,  when  they  find  themselves 
cornered. 

A  corner  in  pork  is  just  as  close,  and  the  cornerers 
themselves  just  as  remorseless,  as  those  in  stocks. 

This  was  how  I  came  to  be  caught  short  in  one  of 
these  same  corners.  The  five  hundred  bales  of  cot- 
ton bought  in  May,  netted  me  $10,000,  the  price 
having  risen,  in  ten  days,  no  less  than  forty  cents  a 
pound. 

This  lucky  operation  at  once  brought  me  into  the 
speculative  mercantile  circle.  I  began  to  take  an  in- 
terest in  the  price  of  produce  and  provisions,  and  to 
learn  the  A  B  C  of  operations  in  tobacco,  sugar,  grain, 
and  PORK. 

The  Fifth  Avenue  Hotel  has  long  been  the  finan- 
cial up-town  evening  center,  and  in  1864,  all  who 
were  interested  in  the  rise  and  fall  of  merchandise, 
etc.,  as  well  as  stocks  and  gold,  flocked  thither  like 
boys  round  an  emptied  sugar  cask. 

One  evening,  early  in  July,  a  few  days  after  the 
gold-burst  upwards,  six  men  sat  in  a  circle  within  the 
reading  room  of  that  huge  marble  tavern,  exchang- 
ing views  upon  a  great  variety  of  subjects.  Two  of 
these  men,  L and  myself,  were  stock  operators, 


ENGINEERING   A    CORNER    IN   PORK.  401 

one  was  a  noted  gold  broker,  and  the  other  three 
were  in  the  dry  goods  and  raw  cotton  line.  What 
we  didn't  s.ay  on  the  subjects  of  stocks  and  general 
merchandise,  would  hardly  be  worth  telling,  for  our 
session  was  a  protracted  one,  and  one  or  the  other  of 
us  had  taken  flyers  in  almost  every  speculative  direc- 
tion. First  it  was  stocks  and  gold,  then  cotton,  iron, 
petroleum,  turpentine,  wheat,  tea,  molasses,  butter, 
cheese,  etc.,  etc.,  through  the  whole  scale. 

At  length  some  one  said  "Pork!"  and  now  all  our 
tongues  wagged  merrily.  "Pork  was  the  thing  to 
go  into  now,  on  the  short  side."  Four  of  our  circle 
had  bought  it  a  few  weeks  before,  and  sold  out  at  a 
profit  of  ten  dollars  a  barrel,  and  seemed  thoroughly 

booked  in  the  business ;  while  L and  myself  had 

taken  notes  on  it,  for  a  month  previous,  and  were 
watching  the  article  in  question,  as  it  slipped  upwards 
on  its  greasy  trail. 

Enter  J.  L at  this  moment. 

He  was  a  partner  in  the  house  of  R ,  H , 

B &  Co.  He  stared  round  the  room,  quickly 

espied  our  circle,  and  steered  towards  it,  discharging 
volumes  of  cigar  smoke  as  he  drew  near.  He  was  an 
authority  on  the  subject  of  pork,  for  his  firm  was  in 
the  provision  business. 

"  How  is  pork  ? "  chorused  all. 

"Strong!  Fifty- three  dollars  bid  for  August  de- 
liveries," was  the  reply. 

After  that  he  gave  us  an  account  of  the  "  corner," 
which  had  been  engineered  in  the  pork  market. 

The  leader  in  the  movement  was  C ,  a  wealthy 

packer,  and  storage  man.  With  him  were  joined  a 
number  of  other  firms  who  had  bought  pork  at  va- 


402  INSIDE    LIFE  IN   WALL   STREET. 

rious  prices,  from  thirty  dollars  upwards.  Three  cir- 
cumstances had  assisted  them  in  their  scheme,  viz., 
the  great  ease  in  money  which  had  ruled  in  June  at 
five  or  six  per  cent.,  the  rise  in  gold  with  which  pork 
as  well  as  other  exportable  commodities  sympathized, 
and  the  enormous  short  interest  in  pork.  The  more 
conservative  firms,  in  consideration  of  its  rise  of  four 
or  five  hundred  per  cent.,  had  been  selling  it  for  fu- 
ture delivery,  and  the  cornerers  had  taken  their  con- 
tracts for  July  and  August.  If  money  continued 
easy,  and  gold  kept  up  for  six  weeks  longer,  pork 
would  rise  to  seventy  dollars  per  barrel,  but  if  not, 
then  it  would  drop  back  to  thirty  or  forty  dollars,  and 
the  corner  would  be  broken  up. 

These  were  the  questions  to  be  answered. 

But  whereas  after  so  protracted  a  season  of  easy 
money,  it  was  likely  to  grow  tight,  and  gold,  after  a 
rise  of  one  hundred  per  cent.,  might  naturally  fall 
fifty  per  cent.,  (so  we  all  reasoned,)  pork  was  a  better 
sale  than  purchase.  We  would  sell  short  to-morrow. 

This  was  the  decision  of  L and  myself,  when  we 

parted  that  night. 

The  next  morning  we  went  to  the  office 'of  R , 

H ,  B &  Co.,  in  Water  Street.  The  senior 

member  of  this  firm,  a  stout,  cheery,  wholesome  look- 
ing gentleman,  intimated  that  we  were  on  the  right 
track  if  we  sold  pork;  "in  fact,"  said  he,  "I  should 
take  a  chance  at  it  myself  if  I  hadn't  been  heated 
up  and  cooled  down  so  often;"  meaning  thereby  that 
he  was  now  on  the  shady  side  of  fifty. 

So  we  accompanied  J.  L to  the  Corn  Exchange, 

or,  as  it  is  sometimes  called,  the  Produce  Exchange. 
This  is  one  of  the  institutions  of  New  York.  A  huge 


FROM   PORK   TO   BEANS.  403 

brick  building  on  the  corner  of  Whitehall  and  Pearl 
Streets,  only  the  upper  part  of  which  however  is  used 
by  the  association  of  merchants  who  meet  there  from 
twelve  to  two  o'clock  daily.  The  hall  in  which  they 
meet,  occupies  the  whole  of  the  second  floor  of  the 
building.  The  clock  struck  twelve  as  we  entered  this 
room,  which  was  already  crowded  with  dealers.  They 
were  a  very  different  looking  set  of  men  from  those 
who  congregate  in  and  about  the  Stock  Exchange. 
There  was  about  them  an  air  of  solidity  and  of  legiti- 
mate trade.  As  the  hour  flew  by  we  waited  for  busi- 
ness to  commence,  but  nothing  seemed  to  be  doing. 
There  was  no  noise,  and  all  the  conversation  was  car- 
ried on  in  a  low  tone.  They  seemed  to  be  waiting  for 
something  which  never  came,  and  reminded  us  very 
much  of  the  visitors  inspecting  an  agricultural  fair. 
Some  of  them  gathered  round  little  pans  of  flour,  and 
took  pinches  between  their  fingers  and  moistened 
them  in  saucers,  as  if  they  were  making  paste  samples ; 
others  poked  their  fingers  into  lard  tubs,  or  punched 
out  small  pieces  of  cheese,  or  spooned  up  little  lumps  of 
butter  and  tasted  them,  smacking  their  lips  and  hold- 
ing their  heads  on  one  side,  with  the  most  knowing 
of  looks  upon  their  faces.  One  old  gentleman  in  a 
black  coat,  black  stock,  and  a  wig  of  the  jettiest  hue, 
was  peering  into  a  barrel  of  beans,  like  a  magpie 
squinting  into  a  marrow-bone.  The  majority  of  the 
crowd,  however,  seemed  to  be  engaged  in  pleasant, 
social  conversation. 

In  the  north-east  corner  of  the  room,  stood  a  clus- 
ter of  twenty  or  thirty  men  who  were  apparently 
more  busy.  Those  of  low  stature  were  in  the  center, 
and  the  tall  ones  looked  over  their  shoulders.  They 


404  INSIDE    LIFE   IN   WALL    STREET. 

talked  almost  in  a  whisper  and  in  a  very  few  words, 
handling  their  memorandum  books  briskly  and  jotting 
down  as  they  talked.  What  could  they  be  doing? 
Buying  and  selling  pork !  We  joined  this  coterie,  and 

J.  L informed  us  that  if  we  wished  to  sell,  he 

could  dispose  of  two  thousand  barrels  of  new  mess, 
deliverable  in  July  or  August,  at  forty-seven  dollars 
per  barrel,  and  ten  dollars  a  barrel  margin  to  be  put 
up  by  both  parties.  We  gave  the  order.  Our  two 
thousand  barrels  were  immediately  snapped  up  by  a 
sallow  little  man  in  a  green  vest,  yellow  pants,  red 
neck- tie,  covered  with  a  profusion  of  jewelry,  and 
looking  very  much  like  a  successful  and  retired  pirate, 
who  was  hovering  about  the  skirts  of  the  crowd. 

My  proportion  of  this  short  sale  was  one  thousand 
barrels.  For  the  next  two  weeks  we  sought  the  fel- 
lowship of  the  pork  men.  Pork  on  the  brain.  We 
thought  pork,  talked  pork,  handled  pork,  dreamed  of 
pork,  and  did  everything  with  it  except  eat  it,  because 
it  cost  too  much.  The  pork  men  are  very  much  after 
the  pattern  of  the  Wall  Street  men.  Jolly  boys, 
astonished  at  nothing,  much  given  to  the  eating  and 
drinking  of  good  things,  fond  of  jokes  which  border 
on  the  broad,  and  always  on  the  lookout  for  commis- 
sions, with  a  sharp  eye  to  the  margins  of  their  cus- 
tomers. 

Everything  now  "  went  merry  as  a  marriage  bell," 
for  pork  was  falling,  and  we  were  preparing  to  put 
money  in  our  purses.  It  was  also  gratifying  to  our 
vanity,  when  we  reflected  that  we  were  right  in  the 
financial  reasonings  on  which  our  sales  of  pork  had 
been  based.  Money,  we  said,  would  tighten,  and 
gold  fall.  Sure  enough,  gold  did  drop  to  244,  and  as 


PALPITATIONS   IN   PORK.  405 

for  money,  it  became  suddenly  as  scarce  as  roses  in 
December.  This  pressure,  the  pork  men  said,  was  a 
"squealer."  There  were  palpitations  and  flutterings 
at  the  Corn  Exchange  that  morning,  and  the  stal- 
wart cornerers  shook  in  their  well  greased  boots,  for 
was  not  new  mess  pork  down  to  thirty-eight  dollars? 

I  could  cover  my  short  sale  at  $9,000  profit,  not 

reckoning  in  the  commission  due  to  R ,  H , 

B &  Co.,  which  was  two  and  one-half  per  cent 

on  $47,000,  the  contract  price  at  which  the  pork  was 
sold.  But  who  ever  heard  of  a  man  covering  a  short 
sale  in  a  panic?  Prices  looked  then  as  if  they  would 
never  recover  themselves.  So  it  was  now,  instead  of 
taking  my  profit  I  sold  another  thousand  barrels  at 
37.  In  one  week  pork  had  risen  to  42.  Then  I 
covered,  and  found,  instead  of  a  nice  little  proP.t,  I 
had  a  nice  little  commission  bill  of  $2,000,  to  pay 

R ,  H ,  B &  Co.  In  fact,  I  found  that 

pork  owed  me  money,  and  was  uneasy  till  pork  paid 
me  that  money,  or — owed  me  more.  That  money 
must  be  recovered.  How  could  it  be  done  ?  I  dared 
not  sell,  for  I  was  in  the  position  of  the  burnt  child, 
who  dreads  the  fire.  Ha !  a  thought !  I  would  sell 
a  call  on  favorable  terms. 

Ca.lls  and  puts  are  sold  in  pork,  just  as  they  are  in 
stocks. 

I  sold  a  call  for  one  thousand  barrels  of  pork,  that 
very  night  at  the  Fifth  Avenue  Hotel,  or  rather  J. 

L sold  it  for  me.  I  thus  became  responsible  to 

deliver  to ,  any  time  within  sixty  days,  at 

forty-three  dollars  and  fifty  cents  per  barrel,  one 
thousand  barrels  of  new  mess,  and  in  considera- 
tion thereof,  I  received  one  thousand  dollars.  This 
25 


406  INSIDE    LIFE   IN  WALL   STEEET. 

partly  wiped  out  my  loss,  but  there  was  the  call  still 
hanging  over  me. 

"  These  calls  are  nasty  things,"  observed  Uncle  Dan- 
iel, after  his  Harlem  fight. 

"  So  say  we  all  of  us."     Especially  a  sixty  day  call. 

If  pork  should  go  to  seventy  dollars,  I  should  stand 
out  fifteen  thousand  besides  commissions,  which  should 
never  be  forgotten  in  these  little  operations. 

This  was  late  in  August,  gold  was  tottering,  but 
sixty  days  is  a  long  time.  There  was  one  way  in 
which  I  could  save  myself;  I  could  hedge  by  buying 
a  call  for  the  same  amount ;  let  the  one  call  offset  the 
other. 

I  bought  my  call.  Pork  rose,  and  in  two  weeks  it 
showed  me  a  net  profit  of  five  hundred  dollars.  At- 
lanta had  just  fallen,  and .  gold  was  on  the  down 
grade,  but  all  my  spare  cash  was  locked  up  in  mar- 
gins. I  yearned  to  sell,  but  could  not. 

But  while  dwelling  on  my  uncomfortable  position, 
I  remembered  the  profit  on  my  call.  I  took  the  con- 
tract to  my  broker,  but  he  refused  to  accept  it  as  a 
margin.  As  I  was  going  out  of  the  office,  I  met  the 
Lobster,  so  called  from  his  very  red  face  and  bulging 
eyes.  He  had  recently  gone  into  the  business  of 
buying  and  selling  on  commission,  and  so  was  willing 
to  make  concessions  for  the  purpose  of  getting  busi- 
ness. His  eye*  bulged  still  more,  and  his  face  grew 
a  shade  redder,  as  he  listened  to  my  proposals,  then 
thrusting  my  call  into  his  pocket,  he  rushed  into 
the  gold  room,  and  in  the  twinkling  of  a  star  rushed 
out  again  and  announced  that  he  had  sold  ten  thou- 
sand gold  at  243.  In  twenty-four  hours  gold  struck 
230,  but  the  Lobster  had  been  meanwhile  kept  dili- 


A   PROVISION   AND   PRODUCE   PANIC.  407 

gently  at  work  selling  for  my  behoof,  and  already  I 
had  $6,000  profits.  In  two  weeks  after,  when  gold 
reached  214,  my  profits  had  run  up  to  $19,000.  Now 
gold  flew  up  to  228,  and  if  my  transactions  had  been 
closed  at  that  figure,  I  should  have  stood  just  where 
I  started.  But  the  upward  spasm  soon  passed,  and 
gold  resumed  its  downward  course.  When  it  touched 
190  I  gave  the  order  to  cover  my  shorts.  This  was 
done  at  a  profit  of  $39,000.  Then  reversing  my  en- 
gine, I  bought  $200,000 ;  when  the  price  shot  to  200 
the  next  day,  I  sold  and  raked  in  $20,000.  In  one 
month  I  had  made  $59,000  out  of  a  pitiful  $500  on 
a  pork  call. 

Now  that  pork  owed  me  nothing,  I  closed  my  pork 
call  without  either  profit  or  loss.  Still  there  remained 
the  thousand  barrels,  which  I  had  agreed  to  deliver 
at  forty-three  fifty,  with  pork  rising  every  day.  It 
touched  43,  and  I  bought  one  thousand  barrels  to  hold 
ready  for  delivery,  when  a  little  speck  appeared  in 
the  western  sky,  in  the  shape  of  a  provision  and  pro- 
duce panic,  in  Chicago  and  other  western  cities. 
Money  grew  tight,  and  the  pork  and  grain  men  were 
in  distress.  They  had  stood  up  firmly  under  their 
loads,  but  contemplating  the  fall  of  gold,  and  its  re- 
duced price  for  ten  days,  was  too  much  for  their 
nerves,  and  they  weakened. 

The  7th  of  October  was  a  lively  day  among  the 
pork  men  of  the  New  York  Corn  Exchange,  as  I 

afterwards  learned  from  L ,  (who  had  an  interest 

of  five  hundred  barrels  in  the  pork  market,  and  to 
whom  I  had  delegated  the  task  of  looking  after  my 
thousand  barrels  that  day,  inasmuch  as  I  was  then 
busily  engaged  in  taking  care  of  Cumberland.)  The 


408  INSIDE    LIFE  IN   WALL    STEEET. 

first  thing  which  caught  his  eye,  on  approaching  the 
pork  crowd,  was  the  retired  pirate  to  whom  I  had  sold 
my  first  thousand  barrels,  flying  about  as  if  he  were 
busily  engaged  in  scuttling  some  merchant  vessel. 

He  came  up  to  L ,  and  recognized  him  at  once,  as 

his  legitimate  prey.  Unfortunately,  our  broker  was 
late  that  day,  and  the  pirate  ascertaining  that  fact, 

from  L ,  promptly  volunteered  his  services,  which 

L as  promptly  accepted,  for  pork  was  dropping 

one  dollar  per  barrel,  every  five  minutes. 

"Sell  fifteen  hundred  barrels  at  42,"  said  L . 

"All  right!"  said  the  pirate,  and  he  shuffled  off  to 
execute  tbe  commission ;  poking  his  head  under  the 
coat-tails  of  a  tall,  weary  looking  porkist,  he  came 
back  speedily,  and  reported  the  best  price  as  41  £. 

"Then  sell  at  41  £,"  said  L . 

Again  his  volunteer  agent  insinuated  himself  into 
the  crowd,  and  stayed  there.  The  crowd  kept  up  a 

perpetual  whispering.  L was  in  dismay,  for  pork 

was  now  reported  as  offered  at  41,  and  weak  at  that; 
he  poked  his  long  arm  between  two  heads,  touched 
the  pirate  on  the  shoulder  and  nodded  very  hard  to 
him  to  sell ;  he  nodded  back,  and  kept  his  place  in 
the  crowd. 

L then  made  a  feeble  offer  of  fifteen  hundred 

barrels  of  new  mess,  at  41.  Several  turned  round 
and  stared  at  him,  and  then  resumed  their  whisper- 
ing. L said  he  felt  very  bad. 

The  pirate  here  made  his  appearance,  and  taking 

L affectionately  by  the  arm,  led  him  aside,  and 

informed  him  in  confidence,  that  he  knew  a  party,  a 
friend  of  his,  who  would  take  that  fifteen  hundred 
barrels  at  401 .  That  was  about  the  market  price. 


DRY   LAND   PRIVATEERING.         .  409 

This  offer  was  gladly  embraced  by  L ,  for  the 

next  day  pork  might  go  to  35.  Such  is  the  reason- 
ing of  one  who  is  suffering  from  a  panic.  We  sur- 
mised that  the  "party"  in  question  was  probably  the 
pirate  himself,  for  pork  rose  in  a  few  days  up  again 
to  43,  but  there  was  no  means  of  proving  our  suspi- 
cions, and  so  we  pocketed  our  losses.  I  was  nearly 
four  thousand  dollars  out  already  on  that  call.  The 
sixty  days,  during  which  the  call  ran,  shortly  after 
expired,  and  once  more  I  breathed  freely. 

Space  will  not  admit  of  our  noticing  at  greater 
length,  the  various  speculative  operations  carried  on 
at  the  New  York  Corn  Exchange,  nor  describe  our 
further  transactions  in  that  field. 

Suffice  it  to  say  that  combinations  are  there  organ- 
ized and  corners  engineered,  not  only  in  pork,  but 
in  wheat,  corn,  beef,  butter,  cheese,  and  many  other 
commodities,  very  much  to  the  disadvantage  of  the 
public  generally,  to  say  nothing  of  the  speculators 
who  are  caught  thereby. 

When  we  had  made  our  first  operation  in  pork,  we 
went  into  grain.  This  article  may  be  said  to  be  in  a 
state  of  chronic  corner,  as  every  housekeeper  who 
has  occasion  to  buy  flour  is  well  aware.  We  had  the 
satisfaction  of  knowing  that  we  sold  grain  to  the  cor- 
ner-brigands at  a  very  high  price,  which  doubtless, 
in  the  end  proved  to  them  a  losing  purchase,  although 
an  unfortunate  sale  for  us.  After  that,  we  sam- 
pled some  butter,  and  thinking  it  too  high  consider- 
ing its  quality,  we  sold  butter  short,  and  as  it  melted 
down  under  the  fierce  rays  of  the  sun  of  Atlanta,  we 
coined  its  oily  substance  into  double  eagles.  Then 
we  thrust  our  speculative  knives  into  cheese,  and  flat- 


410  -    INSIDE    LIFE    IN   WALL    STREET. 

tered  ourselves  that  we  had  helped  to  puncture  the 
caseous  balloon,  and  contributed  to  the  collapse  of  the 
aeronaut  who  had  inflated  it,  to  the  sorrow  of  all 
lunchers  and  sandwich-eaters. 

Finding,  that  after  a  campaign  of  three  months  on 
the  Corn  Exchange,  we  had  come  out  nearly  even, 
we  bid  adieu  forever  to  pork,  corn,  wheat,  butter,  and 
cheese,  except  in  a  dietetic  way,  and  in  the  future, 
concentrated  ourselves  upon  gold  and  stocks,  having 
discovered  that  we  knew  more  about  our  own  special 
trade  than  about  cut  meats  and  cereals. 


CHAPTER  XXVI. 
THE  WORSHIPERS   OF   THE  GOLDEN  CALF. 

The  Old  Fogies  Go  In — The  Cavern  of  the  Gold  Brigands — Fresh 
Levies  From  the  Country — Margins  on  the  Wing  to  Their  Nests  in 
the  Gold- Room — The  Bulls  and  Bears  Marshal  Their  Forces  for 
Another  Engagement — The  Bears  Under  the  Yoke — Gold  Once 
More  on  the  Rampage — What  Became  of  Our  Quartette — I  Sell 
"One  Hoondret  Tousand  on  a  Dree  per  Shent.  Marchin  " — The 
Old  Rat  Nibbles  at  a  Cheese— My  Pile— A  Jew  Broker  Extracts 

Many  Shekels  From  a  Gentile — The  History  of  My  Friend  L 

—The  Gold  Carnival  at  its  Height— Dancing  in  the  Gold  Room— A 
Riotous  Market  at  the  Fifth  Avenue  Hotel — A  Message  from  the 

Death-bed  of  L The  Last  Scene  in  the  Career  of  a  Great 

Speculator. 

IHE  gold  men  moved  into  their  new  room  on 
the  corner  of  William  and  Beaver  Streets, 
late  in  September. 

The  downward  course  of  gold  after  the  fall  of 
Atlanta,  seemed  so  reasonable,  that  a  new  element 
entered  into  the  speculation,  consisting  of  cooler  and 
more  cautious  men.  As  the  current  rolled  down  from 
the  mountain  height  of  254,  they  put  their  arms  up 
to  the  elbows  in  the  golden  gravel,  and  in  ten  days 
became  as  mad  as  the  maddest  of  the  throng. 

The  gold  room  was  like  a  cavern,  full  of  dank  and 
noisome  vapors,  and  the  deadly  carbonic  acid  was 
blended  with  the  fumes  of  stale  smoke  and  vinous 
breaths.  But  the  stifling  gases  engendered  in  that 
low-browed  cave  of  evil  enchanters,  never  seemed  to 


412  INSIDE    LIFE  IN   WALL    STREET.       * 

depress  the  energies  of  the  gold-dealers ;  from  "  morn 
to  dewy  eve  "  the  drooping  ceiling  and  bistre-colored 
walls  reechoed  with  the  sounds  of  all  kinds  of  voices, 
from  the  shrill,  piping  treble  of  the  call  boys,  to  the 

deep  bass  of  R.  H ,  J.  R ,  L.  J ,  etc.,  etc., 

while  an  upreared  forest  of  arms  was  swayed  furi- 
ously by  the  storms  of  a  swiftly  rising  and  falling 
market. 

When  we  consider  the  number  of  operators,  the 
amount  of  capital  employed,  and  the  volume  of  busi- 
ness transacted,  the  wide  and  rapid  fluctuations,  and 
the  frequency  with  which  operations  were  repeated, 
it  will  be  no  exaggeration  to  say,  that  in  that  room 
from  September,  1864,  till  July,  1865,  more  fortunes 
were  made  and  lost,  than  in  any  space  of  the  same 
size  before  or  since.  Here  occurred  most  of  the 
Atlanta  tumble,  the  rocket-like  movement  from  187 
to  260,  the  swift  and  countless  vibrations  between 
260  and  200,  the  flying  gallop,  which  carried  the  price 
from  200  to  128,  and  finally,  the  hoist  to  146,  all  in 
the  course  of  nine  short  months. 

The  story  of  great  fortunes  made  in  a  day,  drew 
thousands  from  all  parts  of  the  Republic.  Solid  men 
of  Boston ;  spare  men  from  Connecticut,  whose  sharp- 
ness, as  regards  money,  might  have  enabled  them  to 
beguile  St.  Peter  to  swap  his  golden  keys ;  logy  men, 
with  bovine  eyes,  from  the  state  of  Maine,  stalwart 
Westerners,  familiar  with  the  game  of  bluff  from 
their  earliest  boyhood ;  besides  that  numerous  army 
of  speculators  from  south  of  Mason  and  Dixon's  line, 
already  mentioned.  These  were  only  a  squadron  of 
the  host. 

Each  broker  and  commission  house  seemed  to  have 


A   DIVERSITY   OF   OPINIONS.  413 

been  transformed  into  a  human  magnet,  attracting  to 
itself  all  the  old  and  young  "files"  who  thought  their 
teeth  sharp  enough  to  bite  into  the  golden  pasty; 
while  the  wealthy  banking  houses,  by  their  very 
name  and  reputed  solvency,  received  by  mail,  by  hand, 
and  even  by  telegraph,  in  the  form  of  credits,  vast 
amounts  to  be  used  as  margins,  and  passed  them 
rapidly  out  of  sight  forever  of  the  hopeful  depositors. 
Those  men  who  had  money,  and  were  known  to  be 
of  a  speculative  turn  of  mind,  were  approached  di- 
rectly, by  the  nimble  mercurial  tribe  of  younger 
brokers,  who  solicited  their  business,  painting  in  glow- 
ing hues  the  prospect  of  making  speedy  fortunes. 

After  gold  dropped  to  187,  on  the  26th  of  Septem- 
ber, it  reacted  to  200,  then  fell  back  to  190-191, 
where  it  remained  for  ten  days. 

There  were  now,  as  there  always  are,  in  the  stock 
market,  two  sets  of  opinions.  One  of  these  was  loud- 
mouthed in  the  expression  of  the  belief  that  gold  was 
on  the  way  to  150.  The  other  as  strongly  held  to 
the  belief  in  another  great  rise.  But  this  latter 
opinion  was  scarcely  expressed.  The  party  which 
looked  for  a  further  decline,  was  the  more  numerous 
and  the  more  clamorous,  besides  being  strengthened 
by  the  large  profits  on  their  short  sales  during  the 
recent  fall.  The  party  which  looked  for  another  rise 
was  by  far  the  more  wealthy,  and  numbered  in  its 
ranks  most  of  the  great  banking  houses.  It  was  ob- 
served that  they  were  continually  crying  down  the 
price  of  gold  and  as  continually  buying  it.  The  short 
sales  were  immense,  and  were  as  usual,  quietly  taken 
by  the  bull  party.  For  a  few  days  the  market  was 
in  suspense. 


414  INSIDE    LIFE  IN   WALL*  STREET. 

One  morning  the  roar  of  cannon  was  heard  in  the 
bay,  and  a  report  ran  through  the  street,  that  Rich- 
mond had  been  captured.  The  bear  cohort  rushed  in 
a  body  to  the  gold  room  and  sold  millions  in  expecta- 
tion of  a  fresh  break.  The  price  never  yielded  under 
this  tremendous  pressure,  and  in  twenty-four  hours, 
gold  was  203.  The  bear  cohort  never  flinched,  but 
kept  selling.  In  three  days,  gold  was  216.  The 
faces  of  the  short  sellers  here  became  elongated, 
when  news  came  of  cavalry  Sheridan's  victory,  after 
his  swift  gallop  up  the  valley  of  the  Shenandoah,  and 
down  fell  gold  to  208.  Now  the  bears  commenced 
again  their  furious  hammering,  but  only  succeeded  in 
knocking  the  price  down  one-half  per  cent.,  when 
whisk!  it  jumped  to  220. 

The  crew  of  short  sellers  now  sat  like  shipwrecked 
mariners  upon  a  coral  reef  in  mid  ocean,  watching 
with  wild  eyes  for  a  sail,  which  was  never  to  appear, 
while  night  and  storm  closes  above  them. 

The  tide  rose  rapidly,  and  the  agony  of  the  ship- 
wrecked ones  was  soon  over. 

Gold,  in  ten  days,  was  246,  then  surging  back  to 
230,  it  gathered  itself,  and  poured  in  one  great  wave 
up  to  260.  The  same  men  who  had  sold  it  at  190, 
and  predicted  its  fall  to  L50,  now  bought  it,  and  laid 
bets  that  it  would  be  at  300  inside  of  thirty  days. 
Frailty,  thy  name  is  the  Wall  Street  bear! 

Of  all  the  exultant  crowd,  who  bathed  in  Pactolian 
waters,  and  upon  whom  the  golden  rain  had  fallen  in 
showers,  six  weeks  before,  who  was  the  richer  now  ? 
They  had  prayed  for  riches,  "  Let  the  stream  of  wealth 
be  swift  and  violent."  The  golden  torrent  had  come 
in  answer  to  their  prayers.  On  September  26th,  they 


THE   WOUNDED   AND   MISSING.  415 

laved  in  it,  rolled  in  and  drank  of  it  to  intoxication. 
On  November  9th,  they  woke  as  from  a  dream,  and 
found,  instead  of  a  golden  torrent,  nothing  but  a  bed 
of  stones  and  sand.  They  who  had  engineered  this 
enormous  rise,  and  had  wrought  the  ruin  of  so  many, 
were  blown  up  with  wealth,  and  with  the  self-confi- 
dence that  was,  in  four  short  months,  to  lead  some  of 
them  to  their  ruin.  But  now  they  were  triumphant, 
counting  their  gains,  and  planning  new  stratagems. 

After  every  great  rise  and  fall  in  stocks  and  gold, 
there  comes  the  gazette,  in  which  the  names  of  the 
losers,  and  of  the  financially  dead,  are  recorded. 
This  gazette  is  not  like  that  which  follows  a  battle, 
published  and  spread  abroad,  but  circulates  only  in 
the  stock-market,  or  among  the  friends  of  the  los- 
ing individuals. 

Men  drop  out  of  the  ranks,  and  their  forms  are 
seen,  and  their  voices  heard  no  more  on  'Change. 
The  word  goes  round,  "  Brown  has  gone  up ! "  the 
next  day  he  is  forgotten.  The  rise  of  gold  to  260 

broke  up  our  quartette.  W.  B.  C left  the  street 

in  despair  at  his  losses,  and  never  returned  to  it  again. 

E ,  my  alter  ego,  lost  all  of  his  fortune  except 

$5,000. 

The  writer  was  fortunate  enough  to  receive  a  les- 
son early  in  the  campaign,  which  taught  him  to  stand 
clear  of  short  sales. 

It  happened  thus : 

One  day  in  October,  just  after  gold  had  fallen  to 
208,  on  the  news  of  the  Sheridan  victories,  I  met,  in 
the  doorway  of  the  gold  room,  one  L.  0 ,  a  Ger- 
man Jew,  who  strikingly  resembled,  in  his  personal 
appearance,  a  huge  wharf  rat,  smoothly  shaved  and 


416  INSIDE    LIFE  IN   WALL    STREET. 

dressed  in  the  garb  of  a  broker.  Hailing  me,  he 
spoke,  breaking  English  into  the  following  pieces : 

"  Hein !  Mishter ,  a  vort  mit  you.  Yy  you  not 

do  your  bishness  mit  me  ?  I  do  your  bishness  sheap. 
I  sharge  you  only  dree  per  shent.  marchin,  dree  tou- 
sand  dollars  on  von  hoondert  tousand  gold,  and  you 
bay  me  dree  dollars  and  von  shilling  comeeshion,  den 
I  garry  it  eider  way,  long  or  short.  Shell  a  hoondert 
dish  minoot,  you  mak  blanty  moonish." 

The  bargain  was  clinched  on  the  spot  by  my  hand- 
ing him  a  check  for  three  thousand  dollars,  and  order- 
ing him  to  sell  one  hundred  thousand  gold  at  the 
market  price.  Whereupon  he  dove  into  the  bowels 
of  the  crowd,  waved  his  hand  and  screamed  out  some- 
thing that  sounded  like  von  hoondert,  and  returned 
to  me,  reporting  that  he  had  sold  $100,000  at  208*, 
though  I  am  confident  now,  that  the  rascal  never  sold 
a  dollar.  Then  he  vanished  up  the  street. 

I  thought  that  gold  seemed  a  little  stiffer  that  morn- 
ing, and  on  coming  back  to  the  gold-room,  after  two 
hours'  absence,  gold  stood  at  210*. 

L.  0 soon  made  his  appearance  with  a  woe- 
begone look  on  his  face,  and  asked  me  what  he  should 
do.  While  I  was  deliberating,  he  broke  in  upon  me. 

"  Oh !  Mishter ,  tish  all  right.  You  geep  your 

poseetion ;  but  I  musht  have  more  marchin ;  gif  me 
dree  tousand  dollars  more  and  I  geep  you  short  of 
gold,  den  you  mak  monish." 

A  second  check  for  three  thousand  dollars  was 

drawn  and  duly  consigned  to  the  pocket  of  L.  0 , 

who  just  then  seemed  to  recollect  some  important 
business  which  required  his  presence  elsewhere,  and 
vanished  as  before. 


ANOTHER   LESSON   LEARNED.  417 

It  need  hardly  be  told  that  I  kept  my  position  in 
accordance  with  the  advice  of  L.  0 . 

In  forty-eight  hours,  gold  was  215. 

"Shoost  von  leetle  sheck  more  for  dree  tousand 
dollars,"  said  my  Teuton. 

He  received  it  and  vanished  as  usual. 

It  was  growing  interesting.  Gold  kept  rising,  and 
when  it  reached  217,  "von  leetle  sheck  more"  was 
handed  over. 

On  visiting  the  Evening  Exchange  that  day,  I 
learned  from  one  of  the  door-keepers  that  some  one 
had  been  bawling  out  my  name  a  moment  before,  and 

on  entering,  I  saw  L.  0 jumping  about  like  a  chit- 

tagong  rooster  which  had  been  feasting  upon  brandy- 
cherries,  and  bidding  "two  hoondert  and  seventy-one 
for  von  hoondert  tousand  gold."  The  moment  he 
caught  sight  of  his  luckless  customer,  he  ran  towards 
him,  vociferating,  "  von  leetle  sheck  more  for  dree 
tousand  dollars,  or  I  buy  in  your  gold.  Tish  shtrong, 
tish  dretful  shtrong;"  (meaning  the  market  was  ram- 
pant and  rising.) 

He  was  quieted  down  by  receiving  his  "last  leetle 
sheck,"  together  with  an  order  to  buy  in  my  hundred 
thousand,  short. 

This  transaction  taught  me  at  an  expense  of 
$12,500,  not  to  go  short  of  gold  on  that  twist. 

But  L ,  whom  we  called  the  richest,  wisest  and 

strongest  of  our  quartette,  was  not  so  fortunate. 

Poor  L ,  what  fortunes  and  what  a  fate  was  his ! 

One  evening  in  the  month  of  August,  while  sitting 

on  a  balcony  of  his  brown  stone  front,  in  

Street,  he  told  us  the  story  of  his  Wall  Street  life. 

He  came  into  the  market  in  1862,  with  $10,000, 


418  INSIDE    LIFE   IN   WALL    STREET. 

and  in  less  than  a  year  had  $250,000  to  his  credit 
at  his  brokers.  He  resolved  to  retire  when  he  had 
made  $500,000,  but  having  been  caught  short  of 
Pacific  Mail,  found  himself  in  four  months,  poorer  by 
$100,000.  Five  months  after  this,  his  "pile"  showed 
him  $200,000;  in  two  months  it  was  only  $50,000. 
The  Morse  rise  had  put  $100,000  into  his  pocket,  and 
the  panic  which  followed  it,  had  taken  $90,000  out  of 
his  pocket. 

In  August,  and  while  telling  us  his  story,  he  had 
still  $80,000  lying  in  a  very  exposed  situation,  being 
deposited  as  a  margin  at  his  broker's,  besides  owning 
the  brown  stone  front  house,  in  which  we  were  then 
sitting,  which  had  cost  him  $40,000. 

"I  am  going  to  make  it  up  to  $150,000,"  said  he, 
"and  then,  good-bye  "Wall  Street." 

The  Atlanta  tumble  took  place,  but  L did  not 

profit  by  it. 

When  gold  rose  to  200,  he  sold  $200,000  short, 
and  made  $20,000.  Then  he  made  a  lucky  turn  on 
the  short  side,  in  Erie,  when  it  dropped  to  85  in  the 
panic  of  October  6th.  He  lacked  now,  only  $500 
of  the  $150,000,  on  which  he  purposed  to  retire. 

Gold  had  soon  after  risen  again  to  200,  and  L 

sold  $100,000  at  that  price,  giving  his  broker  orders 
to  cover  at  1991.  This  would  have  exactly  made 

the  $150,000,  and  L would  have  reached  the 

golden  climacteric  of  fortune  and  repose. 

But  alas!  this  was  not  to  be. 

Gold  rose  in  less  than  a  week  to  210.  L com- 
menced "averaging." 

He  sold  another  $100,000  at  that  price.  It  rose 
to  216,  and  then  gave  him  the  shadow  of  a  hope,  by 


BEGGARY RUIN DESPAIR.         419 

falling  back  to  207,  which  was  quickly  dispelled  by 
its  rise  to  220.  Again  he  sold  $100,000.  The  price 
mounted  to  230.  Once  more  he  sold  the  same 
amount,  and  repeated  the  sale  at  240.  He  stood  a 
loser  in  twenty-four  hours,  in  the  sum  of  $130,000. 
Still  he  kept  his  position  manfully,  strained  his  credit, 
borrowed  $20,000  fresh  margin,  and  sold  another 
lot  at  250.  Three  hours  later,  and  his  broker  called 

for  more  margin,  and  L failing  to  respond,  bought 

in,  at  251,  the  whole  $600,000  of  which  his  unfor- 
tunate customer  was  short.  L had  lost  every- 
thing, cash,  margin,  brown  stone  front,  horses  and 
furniture,  and  owed  more  than  $30,000  borrowed 
money.  But  this  was  not  his  worst  loss.  He  lost 
the  one  thing  that  sustains  the  ruined  operator — Hope. 

Three  weeks  he  lingered,  hopeless  and  haggard, 
on  the  fringes  of  the  market,  and  then  disappeared. 
After  two  days  had  gone  by,  and  we  had  not  seen  him, 

I  called  with  E at  his  boarding-house.  He  was 

no  longer  there,  nor  could  the  landlady  give  us  a  hint 
as  to  where  he  might  be  found.  We  saw  him  no 
more  for  six  weeks. 

Meanwhile  the  gold  carnival  was  at  its  height. 
Each  day  the  crowd  grew  denser,  it  packed  the  gold- 
room  with  fervid  masses,  it  formed  in  a  three-quarter 
segment  of  a  circle  at  the  corner  of  William  and 
Beaver  Streets,  buried  ankle  deep  in  the  muddy 
slush,  watching  the  indicator,  which  recorded  their 
gains  and  losses.  The  whole  strength  of  the  spec- 
ulation was  here.  While  stocks  were  halting  and 
bobbing  up  and  'down  in  minute  arcs  of  a  circle, 
gold  rose  and  fell  in  huge  parabolic  curves. 

The  stock-dealers  poured  into  the  crowd.      They 


420  INSIDE    LIFE  IN   WALL    STKEET. 

who  had  got  their  hand  in  by  dealing  in  New  York 
Central,  which  moved  in  a  stately  promenade,  gener- 
ally closed  up  the  ball  by  a  frenzied  galopade  or  a 
daring  swing  on  the  flying  trapeze  in  the  gold-room. 
As  the  winter  wore  away,  the  fun  "  grew  fast  and  fu- 
rious." No  hour  without  some  change  in  the  scenes, 
fortunes  vanished  in  a  day,  or  rose  like  exhalations 
in  a  night.  Fresh  bands  of  revelers  rushed  in  as  the 
weary  ones  departed,  and  margins  with  long  trains 
and  ciphers,  danced  about  and  then  disappeared,  like 
Tarn  O'Shanter's  witches.  In  the  pauses  between  the 
mad  cotillons,  the  well-known  Wall  Street  game  of 
"beggar  your  neighbor"  was  industriously  played. 
Then  suddenly  would  be  heard  the  roar  of  the  Union 
and  rebel  guns  at  the  front,  calling  off  new  figures  in 
the  dance,  when  the  bulls  and  bears  grinning  at  each 
other,  vis-a-vis,  started  once  more  up  and  down,  cross 
over,  dos-a-dos,  cutting  all  manner  of  capers,  and 
each  one  "holding  out  to  dance  the  other  down." 

From  9  A.  M.  till  12  p.  M.,  fifteen  hours  every  day, 
speculation  knew  no  pause.  All  day  long  cham- 
pagne spouted  in  foam-fountains  at  Delmonico's  and 
Shedler's,  and  more  fiery  potations  stimulated  the 
jaded  speculators  in  the  evening,  at  the  Fifth  Avenue 
Hotel. 

Winter  was  rolling  away,  and  the  sun  was  climb- 
ing the  sky  towards  Cancer.  Night  fell  on  one  dark, 
stormy  day  in  January.  The  "street"  had  been  agi- 
tated by  a  thousand  rumors  of  battles,  and  disasters 
to  the  Union  armies.  Gold  was  flying  upwards.  The 
crowd  at  the  hotel  was  never  madder  than  upon  that 
evening.  The  market  was  riotous.  We  stood,  wedged 
in  the  center  of  the  circle,  watching  the  fate  of  the 


THE   DARK   SIDE    OF   THE    PICTURE.  421 

§100,000  we  had  just  staked,  when  a  face  peered 
over  the  shoulders  of  the  outside  ring,  and  a  long 
arm  thrust  a  letter  before  our  eyes.  It  was  directed 

to  E ,  or  to  me.  Opening  it  we  read :  "  L is 

dangerously  ill.  He  wishes  to  see  you  immediately. 

Come  to Street."  The  letter  was  dated  the 

evening  before,  and  should  have  reached  us  that 
morning.  We  forced  our  way  through  the  press,  and 
hurried  to  the  place  indicated. 

The  storm  had  broken  away;  it  was  a  wholesome 
night.  The  air  was  pure  and  still ;  the  moon,  in  her 
first  quarter,  was  sailing  down  the  sky  like  a  great 
birch  bark  canoe.  Whether  it  was  from  distempered 
fancy,  or  the  reflection  of  the  rifted  storm-clouds,  we 
know  not,  but  it  looked  as  though  it  were  made  of 
gold.  Hastening  on  through  glimmer  and  gloom,  in 
the  direction  indicated  by  the  letter,  we  soon  reached 
our  destination.  It  was  a  miserable  tenement  house, 
only  six  blocks  due  east  from  the  palaces  of  fashion. 
We  climbed  five  flights  of  stairs,  and  found  ourselves 
in  a  low  attic,  apparently  untenanted.  As  we  stood 
in  the  hall,  our  ears  caught  the  sound  of  stifled  sobs, 
which  proceeded  from  a  door  which  was  half-way 
open.  We  approached,  and  gazed  into  the  chamber. 
The  dim  light  from  a  tallow  candle  would  have  failed 
to  show  us  the  interior,  but  the  yellow  moon-light, 
streaming  through  the  attic  window,  fell  upon  a 
truckle-bed,  where  knelt  the  sobbing  wife,  and  lit  up 
the  ghastly  features  of  a  dead  man.  We  stepped 

softly  in,  and  gazed  upon  all  that  remained  of  L , 

our  old  friend,  and  late  comrade  in  the  battle  of  spec- 
ulation. His  losses  had  killed  him.  ***** 

The  clocks  from  a  hundred  belfries  slowly  ham- 
26 


422  INSIDE    LIFE  IN   WALL    STREET. 

mered  out  twelve  as  we  turned  again  into  Fifth 
Avenue.  The  long  lines  of  gas-lights  winked  at  us 
like  so  many  flaming  cressets,  all  converging  in  the 
baleful  focus  of  the  Evening  Exchange,  and  seeming 
to  beacon  us  away.  The  moon  was  set,  and  the 
great  constellations  were  marching  up  and  down  the 
sky.  But  the  crowd  of  sodden-faced  men  who  poured 
out  from  the  front  of  the  hotel,  as  we  passed  on  our 
way,  took  no  heed  of  Arcturus  beaming  in  the 
northern  sky,  nor  of  the  stars  blazing  in  the  belt 
of  Orion.  Their  eyes  were  bent  on  each  Other  in 
ravenous  greed,  or  cast  down  upon  the  muddy  pave- 
ment, while  they  marred  the  beauty  of  the  night 
with  their  hoarsely  screamed  bids  and  offers. 


CHAPTER  XXVH. 

ASTRAND   AND   AFLOAT   AGAIN. 

The  Gap  Closes  Up,  and  the  Column  Moves  on  as  Before — Loss  on 
Loss— Tobin  Comes  to  the  Front— Fifty  Millions  of  Gold  Sold— 
E- makes  a  Little  Mistake — A  Dinner  at  Delmonico's — A  Phil- 
harmonic Concert — Lengthened  "  Sweetness  Long  Drawn  Out" — 
Golden  Dreams — A  Slight  Misunderstanding  Cleared  Up  in  a  very 
Disagreeable  Manner— $45,000  Loss  by  a  Slip  of  the  Pen— Sun- 
light Again— The  Bears  Putting  In  Their  Sickles  to  Reap  a  Har- 
vest—Who Went  Short  of  Gold?— A  Bold  Stroke  for  Fortune- 
On  the  Rack  Once  More— E and  Myself  Stand  Guard  Over 

$2,000,000— A  Speculator's  Dream— The  Fatal  Order  Given  and 
We  are  Astrand — The  Final  Break-up — Floating  Away  on  a  Pot  of 
Money. 

have  said  that  a  man  without  money  was 
nothing  in  the  calculations  of  the  stock- 
market.  Let  us  add  that  a  man's  life  counts 
for  little  there.  The  beggared  operator  buffets  the 
waves  unregarded,  and  when  he  throws  up  his  amis 
and  sinks  below  the  surface  of  the  stormy  sea,  by 
which  he  has  so  long  been  tossed,  not  even  a  ripple 
marks  the  place  where  he  went  down.  Even  his 
friends,  the  companions  of  his  voyage,  soon  forget 
his  loss  amid  the  din  and  whirl  and  absorbing  anx- 
ieties of  their  daily  life. 

We  had  to  fight  the  battle  alone  now — E and 

I.     Ou  the  15th  of  January  our  positions  were  re- 
vet, ed — E had  made  fifty  thousand,  and  I  had 


426  INSIDE    LIFE   IN   WALL    STREET. 

lost  the  same  amount.  Standing  up,  like  a  pugilist 
under  punishment  at  the  hands  of  some  strong  op- 
ponent, for  five  weeks,  I  had  received  more  blows 
than  I  had  given.  Holding  gold  at  230,  the  victory 
of  Nashville  had  shaken  $10,000  worth  of  it  out  of 
my  grasp.  The  capture  of  Savannah  had  torn  away 
$20,000.  The  surrender  of  Fort  Fisher  had  cost  me 
§20,000  more. 

These  blows  came  heavy  and  fast.  Gold  dropped 
to  200,  when  nearly  the  whole  force  of  the  market 
seemed  suddenly  to  change  front.  The  great  bank- 
ing-houses who  had  been  buying  gold,  now  com- 
menced selling  it  for  a  further  decline.  Vast  sales 
were  made  between  200  and  205.  When  the  price 
touched  198,  it  stood  firm  for  two  hours  in  spite  of 
the  most  terrific  hammering. 

Some  power  behind  the  scenes  was  holding  it  up ! 
It  mounted  to  201.  Then  the  hidden  cause  revealed 
itself.  During  the  preceding  two  months,  John  M. 
Tobin  had  been  persistently  selling  gold  short,  at  high 
prices,  predicting  that  he  would  "take  it  in"  at  200. 
His  predictions  proved  true.  He  had  "taken  in" 
his  short  gold  at  200,  and  then  bought  heavily 
for  a  rise.  At  four  o'clock,  p.  M.,  he  made  his  ap- 
pearance on  the  street,  just  as  the  board  adjourned, 
and  commenced  bidding  for  lots  of  from  $100,000 
to  $1,000,000,  while  a  little  black-eyed  Jew  broker 
stood  by  his  side  and  recorded  his  purchases.  The 
price  rose  rapidly  to  205.  The  bears,  supposing 
he  was  making  bluff  bids  for  the  purpose  of  selling 
through  other  brokers,  at  first  sold  him  all  he  bid 
for,  but  at  length  they  saw  he  was  an  actual  buyer, 
and  paused.  The  amount  of  short  sales  made  in 


CAUGHT  IN  A  GOLDEN  TRAP.        427 

the  course  of  the  forty-eight  hours  previous,  was 
estimated  to  have  been  fifty  millions.  There  was 
not  this  amount  of  gold  in  New  York.  The  mar- 
ket was  "oversold."  The  short  sellers  at  once  saw 
their  situation. 

The  crowd  began  to  lift  up  their  voices  in  suppli- 
cation and  astonishment.  "  Oh,  let  me  oft'  from  that 
last  half  million  I  sold  you,  John! " 

"What's  your  game,  Tobin?" 

"Boys,  you've  been  selling  more  gold  than  you 
can  deliver,  and  I've  been  buying  some  of  it,"  re- 
plied Tobin. 

Although  many  of  the  smaller  and  more  timorous 
of  the  bear  tribe,  now  covered  their  shorts,  the 
stronger  and  thicker-waisted  ones  still  kept  their 
position,  judging  that  Tobin  would  fail  in  carrying 
up  the  price,  in  the  face  of  Union  victories. 

E and  myself  were  each  short  of  $50,000  gold, 

at  200  i  When  it  rose  to  206,  under  Tobin's  bids,  our 
mood  of  mind  became  highly  reflective.  The  pres- 
sure at  last  became  too  great,  when  we  remembered 
how  neatly  we  had  been  caught  in  the  October  rise. 
We  decided  to  cover  our  shorts,  and  buy  for  a  rise; 
E filled  out  a  joint  order,  by  which  the  "Lob- 
ster" who  was  now  our  sole  broker,  was  empowered 
to  buy  in,  at  the  market  price,  the  $100,000  of 
which  we  were  short,  and  also  buy  another  lot  of 
$100,000  for  the  rise  which  seemed  about  to  take 
place. 

Without  waiting  to  see  at  what  price  our  gold  was 
bought  at,  we  took  a  hack  and  went  up  town  to  Del- 
monico's,  where  we  partook  of  a  sumptuous  repast, 
with  the  concomitants;  in  fact,  a  dinner  such  as 


428  INSIDE    LIFE  IN   WALL    STREET. 

deserved  that  name.  Our  bill  of  fare  read  as  fol- 
lows, viz. : 

Soup—Julien.  Petit  Pois — Pommes  a   la  Ly- 

Poisson— Filet  de  Sole.  onnaise. 

Vin—Haut  Sauterne.  Vin —  Veuve  Cliquot. 

Bifteak — Au  naturel.  Omelette  Souffle. 

Gibier—Perdrix  rod  avec  Truffes.      Glaces—  Cafe  noir. 
Eau  de  vie — Partagas. 

After  that  we  dressed  and  went  to  the  Philhar- 
monic. The  music  there,  of  course,  was  very  clas- 
sical, and  \ve  tried  to  enjoy  it;  but  at  the  conclusion 
of  each  piece  we  devoutly  hoped  that  the  musicians 
could  not  be  prevailed  upon  to  repeat  the  perform- 
ance, for  our  thoughts  were  roving  away  from  the 
concert  hall  to  that  garden  of  Gul(l),  the  Gold  Ex- 
change, where  we  had  "garnered  up  our  heart." 
At  last,  overhearing  a  gentleman,  who  had  just  come 
in  as  the  last  piece  but  one  was  being  worked  through 
slowly  on  the  violoncellos,  whisper  to  a  friend  that 
gold  was  208 $  at  the  Fifth  Avenue,  we  broke  away 
from  the  musical  treat  we  were  trying  to  enjoy,  and 
hurried  thither.  The  Lobster  had  gone  home,  but 

R.  H reported  to  us  that  gold  was  "  strong  at 

2081,  with  a  mounting  tendency."  We  were  on  the 
right  track  now.  That  night  we  dreamed  that  it 
rained  double  eagles  and  a  variety  of  other  golden 
coins.  The  next  morning  the  idea  struck  us  of  re- 
maining up  town  and  operating  by  telegraph.  We 
did  so.  At  eleven,  A.  M.,  we  telegraphed  as  follows, 
under  a  new  system  of  cipher  which  we  had  lately 

agreed  upon  :  "  To (the  Lobster),  — 

Exchange  Place.  "  How  is  Joker  ?"  (Joker  meant 
gold.)  Signed,  etc." 


SWALLOWING  A   PLUM.  429 

The  answer  received  at  three  p.  M.,  read  thus : 
"Joker  Sampson  whacker,  axed,  signed,  etc.,"  which 
was,  being  interpreted,  "  Gold  very  strong  at  215, 
what  shall  we  do?" 

Our  reply  went  back  on  the  wings  of  the  lightning 
thus:  "Swallow  Plum,"  (i.  e.  Sell  $100,000.) 

Then  we  went  to  a  dinner,  very  much  on  the  sam- 
ple of  the  evening  before,  and  after  that  strolled  in- 
to the  Fifth  Avenue  Hotel,  prepared  to  receive  the 
congratulations  of  our  broker,  on  having  bagged  that 
day,  a  profit  of  between  $8,000  and  $9,000  apiece. 

The  first  man  we  saw  was  the  "Lobster,"  his  face 
a  shade  less  glowing  than  usual.  He  came  towards 
us  on  the  double  quick,  and  stretched  out  his  claws, 
as  if  he  wanted  something.  This  something  was 
more  margin. 

"More  margin!"  cried  E and  I,  in  consterna- 
tion, "how  so?" 

"Why,  you're  short  $400,000,  and  your  loss,  with 
gold  at  218,  the  price  it  has  just  sold  for,  is  $45,000. 
You  must  give  me  more  margin,  or  I  shall  have  to 
buy  it  in  and  charge  you  with  the  difference." 

"  But,  my  dear  fellow,  didn't  we  give  you  an  order 
to  buy  in  our  $100,000  short  at  206,  and  buy  one 
hundred  thousand  more  for  a  rise  ?  " 

"Not  a  bit  of  it.  Here  is  your  order  to  sell 
100,000  at  the  market  price,  and  I  sold  it  at  206 1. 
Then  you  telegraphed  down  to  sell  100,000  more  at 
115,  and  I  executed  your  order." 

There  was  our  order  sure  enough,  in  letters  that 
seemed  to  our  distorted  optics,  two  feet  long.  Sell 

$200,000  at  market  price,  (206.)  E had  written 

by  mistake  sell  instead  of  buy. 


430  INSIDE    LIFE   IN   WALL    STREET. 

We  margined  up,  and'  waited  in  trepidation  the 
result  of  the  Tobin  movement.  Gold  jumped  to  221, 
and  nine  thousand  more  of  our  margin  was  gone. 

And  now,  the  nervy  fingers  of  the  arch-corn erer 
were  extended  to  pluck  the  fruits  of  his  venturesome 
enterprise,  when  the  price  collapsed  to  218.  The 
market  was  shuddering  under  the  first  breath  of  as- 
tounding news.  The  telegraph  had  just  flashed  over 
the  wires,  that  the  commissioners  of  the  Southern 
Confederacy  were  treating  for  peace,  with  President 
Lincoln  on  board  a  gunboat  on  the  James  River,  and 
once  more  gold  dropped  to  205. 

Tobin's  losses  in  this  attempted  corner  were  ru- 
mored to  have  been  $1,500,000. 

E and  myself,  instead  of  losing  $45,000  now 

bagged  a  profit  of  $6,000  on  the  whole  of  our  joint 
sales. 

Sherman  and  Grant,  that  modern  Thor,  meanwhile, 
were  raining  blows  with  their  ponderous  hammers 
upon  the  shell  of  the  Confederacy,  which  now  showed 
to  the  whole  country  a  yawning  lateral  fissure.  A 
fierce  and  bitter  contest  was  going  on  between  those 
who  still  dared  to  hold  gold  for  a  rise  and  those  who 
sold  it  for  a  fall.  Every  speculator  from  Maine  to 
Minnesota,  who  knew  what  selling  short  signified, 
felt  that  this  was  the  time  to  do  it.  The  ranks  of 
the  bears  were  swelled  by  fresh  accessions,  daily. 
Telegrams  kept  flying  in,  "  Sheridan  has  cleaned  out 
Early;"  "Sherman  has  sacked  Columbia  and  is  sweep- 
ing through  the  Carolinas ; "  "  Grant  has  advanced  his 
parallels  and  is  shelling  Petersburg;"  yet  still  gold 
stood  like  a  rock,  near  200,  in  the  strong  grasp  of 
Tobin  and  many  other  bull  operators.  E and  my- 


PEOBLEMATICAL   PROFITS.  431 

self,  after  a  series  of  petty  losses,  still  stood  $40,000 
ahead.  Now  we  made  a  bold  stroke  for  fortune  by 
selling  $1,000,000  apiece  at  200.  We  were  led  to 
do  this  by  joining  the  Hotel  Brigade. 

Among  the  thousands  of  mysterious  indviduals  with 
which  the  great  metropolis  abounds,  there  is  a  certain 
class  which  we  cannot  describe  better  than  by  calling 
them  hotel  men.  They  dress  in  "purple  and  fine 
linen,  and  fare  sumptuously  every  day,"  but  how  they 
get  their  living  is  a  problem  to  the  casual  observer. 
They  may  be  seen  loitering  in  the  reading-rooms  and 
halls  of  the  different  hotels  throughout  the  day,  and 
are  always  in  their  seats  when  the  dinner  hour  comes. 
The  problem  of  their  existence  is  solved  when  we 
state  that  they  almost  invariably  have  small  capitals 
of  from  $5,000  to  $20,000,  which  they  employ  in  Wall 
Street,  Vhen  the  market  is  in  a  favorable  condition, 
buying  after  a  panic  or  selling  short  when  the  market 
is  higher  than  is  reasonable.  On  every  such  occasion, 
these  men  who  are  generally  stout,  rubicund  fellows, 
may  be  seen  wending  their  way  to  Wall  Street,  as 
fast  as  their  corpulency  will  permit,  and  walking  from 
the  same  cause,  somewhat  wide  between  the  legs,  "as 
though  they  had  gyves  on."  Their  shrewdness  and 
good  judgment  in  stock  operations  is  quite  remark- 
able. Hence  it  was  that  E and  myself  joined 

this  coterie,  when  they  marched  down  in  one  solid 
column,  to  sell  gold  short  in  February,  1865. 

We  had  now  placed  ourselves  on  the  rack.  Our 
margin  of  four  per  cent,  was  liable  to  be  used  up  any 
hour.  The  "  Lobster"  had  consented  to  keep  us  short 
till  the  price  rose  to  203 ;  provided  we  would,  for  his 
protection,  watch  gold  every  moment  from  early 


432  INSIDE    LIFE   IN   WALL    STREET. 

morning  tiU  twelve  o'clock,  P.  M.  Then  the  torture 
commenced.  The  price  rose  to  202*.  Only  one-half 
per  cent,  more  and  we  should  be  shut  down  upon 
with  a  loss  of  thirty  thousand  apiece,  when  we  were 
relieved  by  the  price  falling  to  201. 

We  stood  guard  thus  for  four  days,  now  wrenched 
with  agony  by  a  slight  rise,  and  now  cheered  up  by 
as  slight  a  decline.  Sleepless  nights  and  days  of 
pain.  To  me  sleep  came  at  length ;  but  such  a  sleep. 
It  was  after  a  day  of  more  than  usual  suspense  that 
I  returned  home  at  seven  in  the  evening,  leav- 
ing E to  stand  sentry,  and,  if  necessary,  give 

the  order  that  sealed  our  fate,  for  gold  stood  again 
at  202i 

Dropping  on  a  lounge  in  my  chamber,  I  was  in  an 
instant  lost  in  sleep,  heavy  and  dreamless,  as  if  struck 
by  some  unseen  hand.  It  was  four  hours  bSfore  the 
brain  awoke  and  showed  me  dreams.  I  was  wan- 
dering through  splendid  halls,  listening  to  music ; 
banquets  and  garlands  were  spread  upon  tables, 
around  which  forms  flitted  and  faces  lightened. 
Then  the  scene  shifted  to  a  wilderness  of  beauty, 
moonlit  and  lonely.  Suddenly  a  sound  of  roaring 
waters  broke  in  upon  me,  and  looking  up  I  saw  the 
face  of  L stretched  cold  and  stark  in  his  miser- 
able attic,  far  above  me  as  if  miles  away ;  while  a 
terrible  figure  stretched  down  its  hands  filled  with 
treasure,  just  beyond  my  reach,  and  beckoned  me  to 
follow  it.  Then  a  bell  tolled  slowly,  and  finally  rang 

quick  peals.  I  awoke  and  saw  E standing  at  the 

door. 

The  agony  was  over. 

At  eleven  o'clock  gold  had  risen  to  203,  and  E 


THE  DREAM  OF  A  SPECULATOR. 


THE  GOLD  SPECULATION  COLLAPSING.    435 

had  given  the  fatal  order  to  cover.  The  Lobster 
wedged  his  way  into  the  crowd,  and  bid  203  for  fifty 
thousand,  and  bought  it  at  that  price.  While  he  was 
bidding  for  $100,000  more,  a  well-known  operator 
rushed  in  from  the  telegraph  room,  and  bid  2031  for 
five  hundred  thousand.  In  thirty  seconds  gold  was 
204.  Our  $1,950,000  was  bought  in  at  an  average 
price  of  203 1. 

Out  of  forty  thousand  dollars,  I  had  five  hundred 
only  remaining;  exactly  the  amount  which  I  had 

deposited  eight  years  before,  in  the  hands  of  0 , 

as  a  margin  for  my  first  venture  in  Old  Southern. 

Naturally  enough,  E fell  sick  on  this  result, 

and  for  four  months  the  stock-market  never  saw  his 
face.  I  was  now  alone. 

If  there  is  a  blissful  feeling,  it  is  that  experienced 
by  the  weary  operator,  when,  after  a  long  campaign, 
in  which  fortune  has  run  against  him,  he  rests  from 
his  toils,  with  the  consciousness  that  all  is  not  lost,  so 
long  as  hope  and  a  small  margin  still  remain. 

After  such  a  rest  for  two  weeks,  I  rejoined  the  ranks. 

Meanwhile,  the  sword  of  Sherman,  which  scarred 
the  fair  bosom  of  the  Carolinas,  was  cutting  great 
slits  in  the  balloon  of  the  gold  speculation,  which 
was  fast  collapsing.  Gold  had  broken  to  87,  and 
then,  on  the  news  of  the  repulse  at  Fayetteville, 
North  Carolina,  ran  up  to  194.  That  news  came  one 
morning  at  the  Exchange,  and  I  sold  $5,000,  on  the 
pledge  of  my  now  modest  margin  of  $500. 

It  has  been  already  stated  in  these  pages,  that  the 
amount  of  gold  and  silver  in  the  United  States,  in 
1863,  was  estimated  at  $250,000,000.  But  the 
amount  floating  about,  outside  of  the  banks,  the  sub- 


436  INSIDE    LIFE    IN   WALL   STREET. 

treasury,  and  the  private  hoardings,  was  comparatively 
small,  and  grew  still  smaller  in  the  summer  of  1864. 

In  February,  1865,  immense  sums  in  gold  coin, 
which  had  been  locked  up,  were  suddenly  brought  out 
and  thrown  on  the  market,  in  view  of  the  speedy 
termination  of  the  war.  Some  of  the  New  York 
banks  sold  all  the  gold  they  held.  The  merchants, 
also,  wishing  to  hedge  against  the  prospective  loss 
on  the  large  amounts  of  imported  goods  they  held, 
and  which  they  had  paid  for  when  gold  was  high,  now 
borrowed  large  sums  in  coin  from  the  banks,  and 
sold  it,  expecting  to  repay  it  by  buying  gold  at  a 
much  lower  price,  within  sixty  days. 

The  burden  became  too  great  for  the  gold  bulls. 
They  fought  stubbornly  against  the  decline,  but  all 
in  vain.  One  after  one  relaxed  their  hold,  and  let 
their  precious  nuggets  drop  on  the  market.  But 
some  of  the  largest  holders  still  kept  their  position, 
hoping  that  something  would  happen  to  turn  the  tide 
in  their  favor.  Gold  fell  to  175.  Then  they  became 
desperate.  Something  must  be  done  to  stem  the 
downward  current. 

Which  of  these  men  it  was  who  played  the  game 
I  cannot  say;  but  one  evening,  at  the  up- town 
exchange,  a  speculative  broker  of  small  means  en- 
tered the  crowd  and  bid  for  gold  by  the  million.  In 
a  few  minutes  he  had  bought  three  millions.  The 
next  morning  the  price,  instead  of  rising  on  these 
heavy  purchases,  fell  three  per  cent.  The  failure  of 
the  buyer  was  announced;  and  though  he  claimed 
that  the  purchases  were  for  his  own  account,  it  was 
understood  by  the  street  that  it  was  an  arranged 
plan  between  him  and  certain  leading  gold  bulls  for 


LAST    CARD    ON    HIGH-PRICED    GOLD.  437 

the  purpose  of  arresting  the  decline ;  but  finding  this 
move  failed  to  accomplish  the  object,  they  made 
their  broker  the  scapegoat.  This  was  the  last  card 
played  by  the  desperate  holders  of  high-priced  gold. 

Nothing  was  left  for  them  now  but  to  slide  out  as 
well  as  they  could.  The  immense  number  of  short 
sales  which  had  been  made  during  the  preceding  six 
weeks  created  a  constant  demand  for  gold,  and  helped 
the  heavy  holders  to  dispose  of  the  vast  amounts 
they  held.  But  many  a  million,  won  upon  the  great 
upward  movement,  was  swallowed  up  as  gold  fell 
with  sharp  spasms  down,  down,  to  128. 

When  it  reached  140  I  figured  up  my  profits. 
Fifteen  thousand  dollars,  all  made  in  four  weeks  out 
of  $500  by  putting  out  a  series  of  short  contracts  as. 
the  price  dropped.  I  had  snatched  treasure  out  of 
the  wreck,  and  was  now  ready  for  a  new  voyage  on 
the  sea  of  speculation. 


CHAPTER  XXVIH. 
DREW  PLAYS  ON  HIS  ONE-STRINGED  LYRE— ERIE. 

Uncle  Daniel  in  Clover — His  Views  Respecting  "  Them  Erye  Sheers  " 
He  Plays  on  His  Musical  Instrument,  Erie— Buy!  Oh,  Buy!  Sell! 
Oh,  Sell!— He  Pays  Off  Some  of  His  Old  Harlem  Scores— He  Slides 
Down  Hill  with  no  Erie  in  His  Hand,  Then  Picks  Up  Erie  and 

Travels  Up  Hill — D and  S Form  a  Partnership — Setting 

and  Baiting  Traps  for  Shorts — Springing  the  Traps  and  Bagging  the 
Game — The  Old  Man  Soliloquizes — My  Fortunes  During  the  Erie 

Rise — A  "Point,"  and  Advice  from  R ,  the  Railroad  Director — 

The  Trick  My  Broker  Played  on  Me— The  Final  Twist— A  Big  Gold 
Trade— The  Ketchum  Forgeries  and  Their  Effect  on  the  Stock-Mar- 
ket — The  First  Move  for  Another  Corner. 

>ALL  STREET,  April  3d,  1865.  The  bears 
were  on  a  "bender,"  tbat  day;  the  market 
was  full  of  honey-combs,  on  which  they 
were  feasting,  for  Erie  had  been  hurled  down  from 
90  to  42. 

Then  was  Daniel  Drew's  hour  of  triumph.  For 
nine  months  stocks  had  been  on  the  downward  track, 
and  he  had  predicted  it.  In  the  summer  of  1864,  he 
showed  by  an  ingenious  argument,  that  Erie  was  sell- 
ing too  high ;  stated  in  his  homely  vernacular,  it  was 
as  follows,  viz. : 

"  Them  Erye  sheers  are  a  sellin'  naow  for  a  leetle 
more'n  they're  wuth.  It  costs  a  heap  naow  to  pay 
runnin'  expenses.  The  Erye  Railroad  Company  has 
to  pay  up'ards  of  $20,000  for  an  ingyne  what  cost 


ANOTHER    CRASH   IN   ERIE.  439 

only  $10.000  afore  the  war.  Coal  and  iron  has  riz,  so 
has  men.  Whar  are  dividends  a  comin'  from?  You, 
boys,  better  not  be  too  fond  of  your  sheers." 

The  "old  man"  was  right.  Erie  at  par,  was  a 
capital  short  sale. 

In  the  fall  of  1864,  he  commenced  a  campaign  in 
that  stock,  which  was  to  last  four  years,  a  campaign 
in  which  he  took  revenge  on  old  enemies,  wiped  out 
old  losses,  filled  his  treasury  with  plunder,  until  1868, 
when  he  retired  from  the  field  a  heavy  loser,  by  the 
closing  battle.  During  three  years  of  that  time, 
Erie  was  like  a  one-stringed  Chinese  lyre  in  his  hands, 
on  which  he  played  two  tunes ;  when  its  price  was 
high,  he  sung  "  who'll  buy  my  Erye  ?  who'll  buy  my 
valuable  Erye  ?  buy  it,  oh  buy  !  " 

When  it  was  low,  he  sung  "  who'll  sell  me  Erye, 
who'll  sell  me  worthless  Erye  ?  sell  me  Erye,  sell, 
sell!" 

And  the  "street"  listening  entranced  to  his  mel- 
lifluous voice,  bought  it  of  him  at  a  very  high  price, 
and  sold  it  to  him  at  a  very  low  price.  Every  night 
Uncle  Daniel  dreamed  of  money-bags,  and  every  day 
his  dream  turned  out  true.  He  coined  money  out  of 
his  musical  performances  on  his  one-stringed  Chinese 
lyre — Erie. 

In  October,  1864,  Erie  fell  with  a  crash  to  85. 
This  fall  tempted  two  prominent  members  of  the 

Harlem  Combination,  L.  W.  J ,  and  J.  M.  T , 

to  take  up  Erie  and  corner  it.  No  corner  could  be 
engineered  without  the  concurrence  of  the  leading 
director,  who  was,  of  course,  none  other  than  Daniel 
Drew.  Accordingly  the  would-be  cornerers  broached 
the  matter  to  him.  Nothing  could  have  suited  him 


440  INSIDE    LIFE  IN   WALL    STREET. 

better,  for  now  he  saw  an  opportunity  offered  to  pay 
off  old  scores  in  Harlem.  He  loaned  them  a  very 
large  sum,  and  made  an  agreement  with  them  not  to 
sell  any  Erie  above  a  certain  price.  The  cornerers 
thereupon  bought  an  immense  block  of  Erie  above 
90.  The  price  quickly  rose  to  105,  and  everything 
looked  rose-colored,  not  only  to  them,  but  to  Uncle 
Daniel.  "Love  laughs  at  locksmiths;"  Daniel  Drew 
laughs  at  contracts,  for  he  generally  finds  a  gap  in 
them,  through  which,  though  it  may  not  be  "as  wide 
as  a  church  door,"  he  manages  to  slip,  when  it  is  for 
his  interest  to  do  so.  The  cornerers  found  themselves 
loaded  with  fresh  stock  at  summit  prices,  and  began 
to  sag  under  their  burden. 

December  passed  into  January,  and  Erie  broke 
down  to  80,  then  lurched  heavily  upward  to  87. 

Now  was  the  hour  for  the  " old  man"  to  act.  He 
arose  and  saddled  his  coal-black  steed  named  Panic, 
and  descended  like  Thalaba  the  destroyer  into  'the 
Dorn-Daniel  caverns  to  evoke  to  his  aid  the  spirits  of 
financial  fear  and  distrust.  He  sold  a  large  amount 
of  Erie,  and  thereupon  made  ready  to  depress  the 
price.  Having  conveyed  to  one  of  his  minions  $20,- 
000  worth  of  convertible  bonds,  he  instigated  the 
procuring  of  an  injunction  forbidding  the  payment 
of  any  dividends  by  the  Erie  company. 

Then  he  constricted  the  money  market,  and  called 

upon  L.  W.  J and  J.  M.  T for  the  money 

which  he  had  leaned  them.  This  demand  compelled 
them  to  throw  overboard  their  stock.  The  price  fell 
twenty  per  cent.  The  would-be-cornerers  had  lost 
a  million,  and  the  Harlem  "calls"  were  partially 
avenged. 


A   NEW   EXCITEMENT.  441 

Now  Uncle  Daniel  prepared  to  reap  a  more  sub- 
stantial harvest.  When  Erie  had  reached  the  neigh- 
borhood of  50,  he  covered  his  shorts  at  an  enormous 
profit. 

Grant  and  Sheridan  were  pounding  at  the  gates  of 
Richmond,  and  another  great  stampede  now  took 
place.  Wall  Street  then  might  have  been  taken  for 
Landseer's  picture  of  Highland  bulls  in  a  storm. 
They  who  had  bought  Erie  at  80,  and  thought  it 
cheap  at  that,  now  sold  it  at  45,  and  said  it  was  not 
worth  20.  It  was  offered  and  sold  in  blocks  of  five 
thousand  and  ten  thousand  shares.  As  fast  as  it 
reared  itself  upwards,  fresh  blows  threw  it  back  lower 
than  before.  It  touched  bottom  at  42. 

The  two  leading  bears,  Uncle  Daniel  and  Dr. 

S ,  (whom  we  have. before  described.)  now  became 

metamorphosed  into  bulls,  and  formed  an  alliance  to 
lift  Erie  out  of  the  slough  into  which  it  had  fallen. 
Having  bought  all  the  stock  they  could  buy  under 
cover,  when  concealment  was  no  longer  possible  they 
bought  openly  immense  amounts.  A  rumor  went 
through  the  street  that  all  this  stock,  which  daily 

was  sent  into  G ,  their  broker,  was  merely  to 

cover  their  shorts. 

The  fever  for  selling  hardly  flagged  as  Erie  rose 

to  49,  at  which  price  E.  B.  K ,  whose  forgeries 

soon  after  startled  the  street,  sold  D &  S ten 

thousand  shares,  seller  60.  In  three  days  the  price 
of  Erie  was  63,  when  it  broke  and  fell  back  to  54. 
Again  the  cry  went  up,  "  Sell !  Sell !"  on  every  side. 
The  conspirators  gathered  from  this  a  fresh  supply 
of  shorts.  Then  Erie  rose  to  65. 

D and  S were  still  gluttonous  for  shorts. 

27 


442  INSIDE    LIFE   IN   WALL    STREET. 

The  whole  street  was  full  of  traps,  baited  to  catch 
short  sales.  All  these  traps  were  connected  with  the 

great  slaughter-trap  set  by  D &  S .     The 

bears  furnished  their  own  bait,  as  follows:  The  price 
of  Erie  ought  to  go  lower.  First,  because  it  has  to 
borrow  the  money  for  its  dividends.  Second,  because 
it  has  risen  twenty-three  per  cent,  in  two  weeks. 
Third,  because  it  is  not  intrinsically  worth  20.  Fourth, 
because  ten  thousand  shares  are  coming  from  Europe, 
etc.,  etc. 

These  baits  were  quickly  swallowed,  and  in  thirty 
days  the  traps  were  full  of  game — shorts. 

All  this  time  Erie  had  been  rising  with  the  usual 
downward  spasms  for  the  purpose  of  encouraging  the 

ensnared  ones.     As  it  ro.se,  D &  S bagged 

the  game,  in  other  words,  compelled  the  bears  to 
cover.  It  touched  85  and  the  shorts  were  all  taken 
in;  then  broke  in  a  panic  to  68.  Tobin  here  stepped 
forward  and  arrested  the  fall  by  taking  ten  thousand 
shares  on  his  sinewy  shoulders.  Dr.  S now  re- 
tired from  the  field  with  a  profit  of  several  hundred 
thousands,  and  Uncle  Daniel  "  went  it  alone "  on  a 
new  twist. 

Once  more  the  traps  were  set  and  baited  as  before. 
Once  more  the  bears  seeing  the  mistake  they  had 
made  by  closing  their  contracts,  swallowed  the  bait 
in  crowds.  Erie,  early  in  July,  rose  to  82,  then 
dropped  back  to  76,  and  looked  very  weak.  The 
bears  were  again  jubilant.  For  three  weeks,  Erie 
vibrated  dully  between  76  and  80.  Like  some  huge 
monster  of  the  deep,  its  torpidity  was  feigned,  for  it 
was  only  waiting  for  more  shorts.  Many  of  the  short 
sellers  were  pupils  and  imitators  of  Uncle  Daniel  in 


TRAPPING  TO  SOME  PURPOSE.        443 

ms  old  bearish  policy,  and  they  could  hardly  persuade 
themselves  now,  that  the  "old  man"  was  not  on  their 
side  instead  of  working  against  them. 

He  stood  one  day  on  the  steps  of  his  broker's  of- 
fice, and  soliloquized  thus,  as  he  looked  on  the  noisy 
crowd,  where  "  his  young  barbarians  were  all  at  play," 
selling  Erie : 

"  Happy  creeturs !  how  merry  they  be.  Wai,  wal, 
I  guess  I  must  pinch  'em." 

He  did  "  pinch  'em."  That  very  day  Erie  rose 
to  85.  The  market  fairly  smoked  with  excitement. 
There  was  no  pause  in  the  upward  movement  during 
the  next  forty-eight  hours. 

The  31st  day  of  July  was  a  scorcher.  From  the 
blistering  pavements  of  Broad  Street,  wave  after  wave 
of  heat  rose  and  vibrated  in  mid-air,  while  the  merci- 
less sun  kept  radiating  new  volumes. 

W.  R.  T ,  wiping  his  flaming  forehead  with  the 

finest  of  cambric,  was  overheard  to  whisper  to  a 
brother  broker  in  his  peculiar  stutter,  "B-B-Big 
th-th-thing  in  Erie." 

The  price  rose  to  92,  fell  back  to  87,  mounted  to  95, 
fell  back  to  94,  then  galloped  to  98  £. 

All  the  time  from  March  till  the  middle  of  June,  I 
had  been  patronizing  the  "Lobster"  with  orders  on 
the  most  liberal  scale,  buying  or  selling  on  an  average, 
two  or  three  thousand  shares  per  day.  Twice  my 
margin  had  been  swelled  to  thirty  thousand,  and  twice 
it  had  shrunk  back  to  its  original  amount,  fifteen 
thousand.  I  had  paid  my  active  broker  nearly  fifteen 
thousand  dollars  commissions  by  these  quick  turns. 

Now  this  helping  to  support  brokers  is  a  weary 
business,  unless  one  can  make  a  little  money  by  it. 


444  INSIDE    LIFE   IN"   WALL    STREET. 

It  was  this  conviction  that  led  me  to  sell  two  hundred 
Erie  short  at  76,  with  the  intention  of  staying  short, 
whatever  might  betide. 

When  Erie  rose  to  80, 1  also  "averaged"  by  selling 
a  second  lot  of  two  hundred  shares.  But  when  it 
jumped  to  85,  under  the  nipping  fingers  of  Uncle 
Daniel,  I  thought  the  matter  should  be  inquired  into, 

and  accordingly  proceeded  to  consult  R .  Some 

men  are  born  poets,  others  are  born  railroad  direct- 
ors. R belonged  to  the  latter  class.  For  aught 

that  may  be  said  to  the  contrary,  a  railroad  stock- 
certificate  may  have  been  the  ominous  plaything  of 
his  childhood,  and  he  may  have  organized  mimic  boards 
of  directors  among  his  school-fellows.  At  all  events, 
he  was  now  a  railroad  director,  and  although  we  do  not 
assert  that  he  belonged  to  the  Erie  Direction,  he  was 
always  presumed  to  know  a  thing  or  two  about  Erie. 
R ,  it  should  be  remembered,  was  the  lucky  spec- 
ulator mentioned  in  our  third  chapter;  but  in  1865 
he  was  very  much  changed  from  the  slender  youth  of 
1857.  He  was  thick-set  now,  with  jowls  which  hung 
down  like  the  dewlaps  of  a  prize  ox.  As  for  the  color 
of  his  face,  to  say  that  it  was  red  would  feebly  express 
it.  It  was  not  suffused  by  "the  patriot's  shame," 
nor  by  the  celestial  roseate  tinge,  which  has  been, 
with  doubtful  truth,  at  least  in  this  age  of  brass,  called 
"love's  proper  hue."  It  fairly  glowed  and  blazed, 
on  the  morning  when  I  consulted  him.  He  lay  in 
bed  in  his  chamber,  and  the  very  sheets  borrowed  a 
ruddy  tint  from  that  burning,  blood-red  face. 

He  was  a  man  of  few  words.  Men  of  his  kidney 
always  are.  But  the  substance  of  what  he  said  was, 
"Keep  your  position,  and  let  Daniel  squeeze  you." 


A   FAITHLESS    LOBSTER.  445 

Not  doubting  that  this  advice  was  given  in  good 
faith,  I  kept  my  position. 

When  Erie  reached  94,  it  grew  scarce  for  delivery. 
In  fact  my  broker  told  me  it  could  not  be  borrowed 
either  for  love  or  money,  and  that  unless  I  could 
deliver  it  in  fifteen  minutes,  he  should  be  under  the 
painful  necessity  of  buying  it  in,  and  closing  me  out, 
with  a  loss  of  $6,400.  In  fifteen  minutes  the  stock 
was  bought  in,  and  in  an  unguarded  moment  my 
broker  entrusted  me  with  the  duty  of  reporting  it  at 
his  office,  whereby  a  very  large  cat  jumped  out  of 
the  bag.  It  appears  that  the  faithless  Lobster,  not 
satisfied  with  the  commissions  to  the  amount  of 
$15,000,  which  he  had  already  extracted  out  of  his 
customer,  desired  to  make  an  additional  sum  by 
speculating  on  my  margins.  When  I  reported  the 
four  hundred  shares  of  Erie  to  the  Lobster's  book- 
keeper, "This,"  said  he,  consulting  his  books,  "makes 
you  long  of  Erie,  at  94." 

"How  so,"  replied  I. 

"Four  hundred  shares  of  Erie,  bought  at  81,  ap- 
pears on  my  books  to  your  credit.  That  closed  up 
your  shorts.  This  last  lot  makes  you  long  four  hun- 
dred, at  94." 

Sure  enough,  my  shorts  had  been  bought  in  with- 
out my  knowledge,  and  the  Lobster  expected  to  put 
the  difference  between  81  and  94,  or  $5,200,  into  his 
own  pocket.  The  ingenuousness  of  his  book-keeper 
saved  me  this  amount,  and  in  one  hour  I  made  $800 
on  my  four  hundred  shares  by  selling  it  at  96. 

I  need  not  add  that  my  account  was  removed  from 
the  office  of  the  Lobster  as  soon  as  his  treachery  had 
been  discovered. 


446  INSIDE    LIFE    IN    WALL    STREET. 

"  New  brooms  sweep  clean."  At  least  I  thought  so, 
two  hours  later,  when  I  raked  in  three  thousand  by 
selling  Erie  at  98 i  and  taking  it  in  at  92£,  in  the 
office  of  my  new  broker.  Suddenly  Erie  sprang  up 
again  to  96.  Groesbeck,  Drew's  broker,  had  called 
upon  the  "short"  gentlemen  aforesaid,  for  thirty 
thousand  shares.  Then  Uncle  Daniel  began  to  twang 
his  Chinese  lyre,  "  Buy  my  Erie,  buy,  oh  buy ! " 

Never  did  the  market  so  bristle  with  "points"  as 
at  four  o'clock  on  the  afternoon  of  that  day.  Fifty 
men  could  have  been  seen  whispering  in  the  ears  of 
fifty  other  men,  or  grasping  them  affectionately  by 
the  arm  and  leading  them  apart  from  the  roaring 
crowd,  to  tell  them  that  Erie  was  the  thing  to  buy. 
The  jackals  who  hunt  in  the  track  of  the  lions  of  the 
market,  were  all  'loping  about  to  induce  the  outsiders 
to  relieve  plethoric  gentlemen  of  their  heavy  loads 
of  stock. 

At  this  juncture,  R ,  the  railroad  director,  drew 

me  aside  and  imparted  "  his  point."  "  Daniel  Drew 
is  going  to  put  Erie  up  to  110  in  less  than  twenty- 
four  hours.  Buy  all  you  can  swing."  R 's  advice, 

respecting  my  short  Erie,  had  somewhat  impaired  my 
confidence  in  his  judgment,  and  yet  still  I  believed 
him  honest.  I  bought  eight  hundred  shares  at  97. 
That  evening  Erie  broke,  and  the  next  day  sold  at  90, 
lessening  my  margin  by  $5,600.  During  the  entire 
three  months'  campaign  which  we  have  been  describ- 
ing, something  was  going  on  below  the  surface  which 
was  shortly  to  disclose  itself  and  rock  Wall  street  to 
its  foundations.  We  allude  to  the  forgeries  of  E.  B. 
Ketchum. 


ONE   MILLION   TOO    MUCH.  447 

This  operator,  afterwards  so  notorious,  had  been 
speculating  for  more  than  a  year,  to  an  enormous 
amount.  In  1864,  he  was  reported  to  have  made 
$1,500,000.  The  gold  break  in  March,  had  made 
him  the  loser  of  millions.  When  Erie  was  hoisted,  by 
Uncle  Daniel,  he  covered  at  76,  one  lot  of  ten  thou- 
sand shares,  which  he  had  sold  for  delivery,  at  49. 
This  transaction  cost  him  $270,000,  and  was  only 
one  in  a  series  of  losses,  which  footed  up  an  aggre- 
gate that  made  even  the  thorough-paced  Wall  Street 
man  stand  aghast. 

For  months  the  fatal  drain  had  been  going  on. 
He  lost  money  by  selling  short,  and  then  he  lost  money 
by  buying  stocks.  The  capital  of  the  banking-house 
to  which  he  belonged  was  four  millions,  and  still  a 
large  sum  of  money  was  lacking  to  meet  his  engage- 
ments. In  an  evil  hour  he  forged  gold  certificates, 
to  how  large  an  amount  will  never  be  exactly  known, 
for  some  of  those  \vho  advanced  money  upon  them 
refused  to  tell  their  losses ;  but  these  forgeries  are 
known  to  have  run  up  to  several  millions. 

On  the  15th  of  August,  something  was  plainly 
brooding  over  the  market.  Mysterious  whispers 
were  afloat.  That  evening  the  same  tall  broker 
above-mentioned  sold  out  for  the  account  of  E.  B. 

K forty  thousand  shares  of  stock.  The  secret 

was  known.  K was  a  fugitive.  Stocks  fell  in  a 

fierce  panic. 

The  next  day  Erie  was  driven  back  to  76.  Uncle 
Daniel  bought  twelve  thousand  shares  of  the  Ketchum 
Erie,  and  laid  his  plans  for  another  corner. 


CHAPTER  XXIX. 
FEMALE    SPECULATORS. 

Do  Women  Speculate  ?— Why  Not  ?— Speculation  Not  Unsuited  to 
the  Female  Character— A  Question  Answered — Ladies  on 
'Change,  and  Young  Misses  Receiving  Billet  Doux  from  Their 

Brokers,  and  Dreaming  of  Stocks — A  Feminine  Pool  in  Harlem 

Notable  Instances  of  Female  Speculators— The  Fortunes  of  Miss 

M ,  a  She-bear,  in  the  Stock  Market— The  Gold  Rise  of  18C6— 

Why  a  Panic  in  London  Makes  Gold  Go  Up— Women  Who  Keep 
Accounts  in  Their  Own  Names,  and  Women  who  Do  Not — How 
Brokers  Carry  Their  Fair  Burdens — Beauty  a  Woman's  Margin — 
Influence  of  Women  upon  Stock -panics, 

Women  speculate  in  stocks  ?  This  question 
is  readily  answered  in  the  affirmative.  More 
than  this,  they  are  not  only  frequent,  but 
daring  speculators.  They  encounter  risks  that  would 
appall  the  stoutest  Wall  Street  veteran,  and  rush 
boldly  into  places,  where  even  a  Vanderbilt  would 
fear  to  tread.  The  female  character  is,  in  many 
respects,  suited  to  a  life  of  speculation.  Speculation 
is  founded  on  hope,  and  women  are  generally  remark- 
ably prone  to  hope.  Speculation  requires  patience 
and  fortitude,  which  are,  or  should  be,  both  womanly 
virtues.  Speculation  derives  its  food  from  excite- 
ment, and  women  often  feed  on  excitement.  Specu- 
lation comes  from  fancy,  and  women  are  much  given 
to  fancy.  Women  of  a  certain  type,  are  naturally, 


WINNINGS    AND    WAKDROBES.  449 

or  by  education,  inclined  to  speculate  in  stocks.  Per* 
haps  they  may  catch  the  infection  from  their  brothers, 
or  uncles,  who  talk  stocks  while  bolting  their  meals 
in  haste,  so  that  they  may  hurry  down  town,  and 
buy  a  little  more  Central,  or  cover  their  short  gold. 
Wealthy  ladies,  who  are  their  own  mistresses,  and 
have  plenty  of  leisure  time,  might  be  expected,  as 
they  sit  embroidering  golden  bees  and  butterflies,  on 
black  velvet,  to  have  their  thoughts  turned  upon 
stock-flyers,  and  to  dream  of  new  equipages,  jewels, 
and  silks,  won  out  of  stocks  or  gold.  From  what- 
ever cause  it  may  arise,  there  are  no  more  eager  and 
venturesome  gamblers  at  Baden  Baden,  in  Germany, 
than  women,  and  there  are  no  more  eager  and  ven- 
turesome speculators  in  stocks,  than  women. 

On  almost  any  bright  day,  when  stocks  are  rising, 
a  dozen  or  more  showy  carriages  may  be  seen  drawn 
up  in  front  of  the  offices  of  prominent  brokerage 
houses,  waiting  for  the  gorgeous  dames  who  ride  in 
them  to  come  out,  when  they  have  transacted  their 
business  with  their  brokers.  Most  of  these  specu- 
lative ladies  are  dowagers  with  large  bank  accounts, 
for  which  they,  perhaps,  thank  their  departed  hus- 
bands, or  fathers,  or  uncles,  and  which  they  are  now 
using  as  margins  in  stock-speculation,  almost  always 
for  a  rise,  for  it  seems  to  them  an  incomprehensi- 
ble thing  that  any  money  can  be  made  by  a  fall  in 
stocks.  Like  so  many  Magdalens,  they  roll  their 
fine  eyes,  not  repentantly,  but  avariciously  upwards, 
towards  the  towering  heights  of  Rock  Island,  or 
New  York  Central,  where  they  hope  to  make  their 
profits. 

Besides  these  middle-aged  matrons,  there  are  not 


450  INSIDE  LIFE   IN   WALL    STREET. 

a  few  misses  in  their  teens,  whose  faces  are  turned 
Wall  Street-wards. 

Imagine  these  sylph-like  creatures  ogling  the  ele- 
phantine bulk  of  Erie  as  it  paces  up  with  a  dignified 
stride,  or  casting  sheep's  eyes  at  Pittsburg  as  it 
dances  on  the  tight-rope  held  by  the  hands  of  a 
clique. 

One  fair  young  creature,  with  wealth  of  blonde 
hair,  leans  pensively  on  her  hand,  and  indulges  in 
pleasant  thoughts  of  Reading,  or  in  her  sleep  has 
sweet  dreams  of  Old  Southern.  Another  quick  bru- 
nette opens  with  palpitating  bosom  a  billet-doux 
from  her  broker,  informing  her  of  the  closing  prices, 
and  enclosing  a  balance  of  profits  which  she  devours 
with  her  eyes;  or  perhaps  it  is  a  more  unpleasant 
missive,  by  which  she  learns  that  Erie,  her  first  love, 
has  proved  treacherous,  or  gold  has  ceased  to  respond 
to  her  vows. 

At  Saratoga,  in  July,  1863,  three  young  ladies, 
possessed  of  a  will  and  several  thousand  dollars  of 
their  own,  made  up  a  "  pool "  in  Harlem  on  their  in- 
dividual account,  and  bought  two  thousand  shares  in 
the  neighborhood  of  100.  Within  four  weeks  the 
rise  to  181  showed  them  to  be  winners  to  the  amount 
of  $75,000.  This  seemed  to  justify  them  in  going 
into  the  wardrobe  line.  Consequently,  they  might 
have  been  seen  every  day  sitting  on  cushioned  stools 
at  Stewart's  and  Arnold,  Constable  &  Co.'s  palaces, 
and  making  heavy  investments  in  moire  antique, 
Mechlin  lace,  and  India  shawls.  But  alas  for  the 
vanity  of  human  expectations ;  they  did  not  sell  their 
Harlem,  and  six  or  eight  weeks  from  that  time  they 
received,  not  a  billet-doux,  but  a  call  for  more  inar- 


FEMININE    FOLLIES.  451 

gin,  for  Harlem  had  sold  down  to  75,  and  instead  of 
making  $75,000,  they  would,  if  they  sold,  now  lose 
$25,000. 

Fortunately  all  of  these  young  ladies  belonged  to 
the  heroic  mould,  and  instead  of  going  into  hysterics 
or  sitting  down  and  having  a  good  cry,  they  went 
manfully,  or  rather  womanfully,  to  work  and  raised 
money,  furnished  the  necessary  margin  to  their  broker 
and  vowed  by  Nemesis  that  they  would  hold  their 
Harlem  till  they  could  make  their  $75,000  once 
more. 

Brave  girls !  Their  heroism  in  six  months  was  re- 
warded, for  in  the  latter  part  of  April,  1864,  while 
the  Commodore  was  hoisting  Harlem,  they  drew 
$80,000  out  of  their  broker's  hands. 

One  of  the  notable  female  speculators  in  Wall 
Street  is  a  maiden  lady,  who  counts  her  property  by 
the  million.  She  is  never  seen  there,  however,  ex- 
cept when  stocks  are  falling,  and  properly  belongs  to 
the  class  of  panic-birds  before  described.  In  these 
seasons  she  may  be  seen  in  her  "  customary  suit  of 
solemn  black,"  tripping  down  to  her  broker's  office, 
prepared  to  buy  at  the  lowest  prices,  and  when  stocks 
go  up  she  always  sends  word  to  her  broker  to  sell  out. 
Her  profits  from  these  investments  have  sometimes 
risen  to  more  than  one  hundred  thousand  per  annum. 

The  most  remarkable  case  of  all,  is  that  of  a  lady 

whom  we  will  call  Miss  M .  She  belongs  to  the 

class  of  the  strong-minded  ones.  Her  face  is  that  of 
a  goshawk,  and  the  white  dove  which  she  wears  some- 
times upon  her  jockey  hat,  seems  constantly  in  the  act 
of  playfully  swooping  down  upon  the  less  amiable  bird 
beneath.  In  her  views  on  financial  Questions,  she  has 


452  INSIDE   LIFE   IN   WALL    STREET. 

always  taken  high  moral  ground,  discountenancing 
all  attempts  to  raise  the  price  of  gold.  During  her 
ten  years'  experience  she  has  made  and  lost  a  fortune 
every  year.  In  the  great  rise  of  1864,  she  stood  one 
hundred  and  thirty  thousand  dollars  better  than  she 
was  in  1863.  Then,  woman-like,  her  hopes  rose  to 
the  ambitious  height  of  half  a  million,  which  seems 
to  be  the  goal  which  most  speculators  propose  to 
themselves.  But 

"  When  lovely  woman  stoops  to  folly, 
And  finds,  too  late,  that  stocks  betray," 

and  brokers  beguile !  She  awoke  from  her  dream  of 
fortune  on  the  18th  of  April,  1864,  when  panic  was 
raging,  with  the  residue  of  her  fortune,  about  $4,000, 
fast  locked  up  in  the  hands  of  her  broker,  who  had 
failed,  and  was  unable  even  to  pay  her  this  small 
balance. 

But  brokers  are  the  most  elastic  of  mortals,  com- 
mercially speaking ;  their  failures  are.  generally  only 
temporary,  and  in  three  weeks  our  heroine  received 
from  her  supposed  insolvent  agent,  $2,000  of  her 
balance.  With  this  she  commenced  to  operate  on 
the  short  side,  for  her  losses  in  the  panic  had,  as  is 
usual  in  such  cases,  converted  her  into  a  bear — a  she- 
bear,  now  mourning  for  her  whelps,  and  on  the  third 
of  April,  1865,  she  had  recovered  forty  thousand 
dollars  of  her  losses.  What  little  bird  now  whispered 
in  her  ear,  "buy  Erie,"  cannot  be  told,  but  she  bought 
it  at  45,  and  flew  up  with  it  to  90,  like  a  witch 
astride  of  a  broomstick.  Once  more  she  had  built 
up  her  fortune,  but  she  did  not  snatch  it  out  of  the 
jaws  of  the  market,  always  open  and  ravenous.  The 
vision  of  a  half  million  still  haunted  her.  She  ca- 


COUNTING   PROFITS    BY    THE    MILLION.          453 

ressed  several  of  her  stock-favorites.  Pittsburg,  Old 
Southern,  Fort  Wayne,  etc.,  etc.,  all  of  which  con- 
duct cost  her  dear.  Her  margin  was  rapidly  dimin- 
ishing. In  May,  1866,  she  ceased  to  buy  stocks,  and 
commenced  to  operate  for  a  fall. 

Gold  had  dropped  to  126.  Everybody  said  gold 
would  go  down  to  110.  Her  broker  told  her  that 
Government  was  selling,  and  so  she  staked  her  re- 
maining $60,000  on  a  short  sale  of  $200,000  gold, 
at  130. 

The  gold-bulls  celebrated  their  carnival,  in  May, 
1866.  When  the  price  fell  to  126,  in  April,  nearly 
every  banker,  broker,  and  operator  in  the  street  stood 
short  of  it,  for  future  delivery.  This  time  the  bears 
thought  they  were  right.  Some  said  the  price  would 
go  to  par,  others  to  110,  but  all  concurred  in  believ- 
ing that  gold  would  never  go  up  again.  Three  times 
more  gold  had  been  sold  than  could  be  borrowed  for 
delivery. 

A  sound  from  across  the  Atlantic,  like  "a  fire-bell 
in  the  night,"  awoke  them  suddenly  from  their  dreams 
of  fortune.  A  panic  in  London! 

But  how  should  a  panic  in  London  make  gold  go 
up  in  New  York  ? 

Let  us  explain. 

All  commercial  transactions,  it  should  be  remem- 
bered, are  conducted,  ki  England,  on  a  gold  basis. 
When  money  is  easy,  and  the  Bank  of  England  has 
a  low  rate  of  discount,  an  active  business  is  often 
done  in  American  securities,  particularly  in  railway- 
bonds,  and  Governments.  It  is  estimated  by  Com- 
missioner Wells,  that  one  thousand  millions  of  the 
latter  are  held  in  Europe.  When  the  rate  of  discount 


454  INSIDE   LIFE    IN   WALL    STEEET. 

by  the  Bank  of  England  is  raised,  and  money  becomes 
tight,  many  of  these  securities  are  sent  to  the  United 
States  to  be  sold,  and  the  proceeds  of  these  sales,  in 
gold,  is  remitted  to  England,  diminishing  in  this  pro- 
portion, the  amount  of  gold  in  this  country. 

Gold  had  risen  to  130,  and  rumors  of  commercial 
distress  in  London  were  already  forewarning  the 
bears  of  their  dangerous  position,  from  which  they 
saw  only  one  means  of  relief,  viz. :  the  sales  of  gold 
by  the  Government.  These  sales  in  a  few  days  ran  up 
to  $30,000,000.  The  Government  agent  was  beset 
by  those  who  were  short  of  gold.  He  was  waited  for, 
button-holed,  and  his  coat-tails  were  almost  torn  off, 
by  the  eager  buyers,  when  he  entered  the  gold  room. 

Still  the  price  stood  firm. 

Late  in  May  the  storm  broke.  The  arrival  of  the 
Cuba  brought  the  news  of  the  greatest  financial  panic 
which  had  ever  occurred  in  England.  The  Govern- 
ment stopped  selling,  and  gold  jumped  to  40.  Erie 
certificates  and  Government  bonds  came  pouring  in 
by  every  steamer,  and  every  outgoing  steamer  carried 
millions  of  gold.  In  six  weeks,  more  than  $40,000,- 
000  had  been  sent  out  of  the  country. 

On  the  9th  of  June  the  price  stood  at  169.  One 
of  the  largest  holders  of  gold  at  130  was  the  firm 

of  M &  D ,  and  this  house  was  almost  the 

only  prominent  one  which  bulled  gold  heavily.  Their 
profits  there,  after  the  arrival  of  the  Cuba  could  be 
counted  by  the  million. 

Many  a  shrewd  merchant  and  operator  found  him- 
self during  the  rise  bound  hand  and  foot. 

J.  M.  T ,  the  great  speculator,  was  caught 

short  of  a  million  or  so,  which  he  bought  in  at  some- 


WOMEX   BROKERS.  455 

thing  over  150.     This  same  individual  then  bought 
largely,  and  sold  $700,000  of  his  purchases  to  the  noted 

merchant,  H.  B.  C ,  at  169.     As  for  the  smaller 

tribe  of  operators,  the  field  was  strown  with  their 
financial  corpses. 

This  "spirt"  in  gold,  it  should  be  noted,  arose 
purely  from  commercial  causes. 

How  fared  it  with  our  heroine  meanwhile  ? 

She  "sat  like  patience  on  a  monument"  of  short 
gold.  When  it  touched  150,  she  descended  from  her 
pedestal,  and  gazing  with  tearless  eyes  upon  her  losses, 
($50,000,)  then  proceeded  coolly  to  gather  up  the 
wreck,  and  reconstruct  her  edifice. 

Who  will  say,  after  hearing  the  story  of  Miss 
M ,  that  women  cannot  speculate  ? 

As  already  noted,  the  wife  of  the  heavy  stock-ope- 
rator is  quite  certain  to  be  provided  for,  and  when  her 
husband  loses  his  all,  he  can  fall  back  on  his  wife's 
money,  and  renew  his  fortune.  Most  of  the  women 
who  speculate  in  stocks,  conduct  their  speculations  in 
the  names  of  male  friends  and  relatives.  Hence  it 
comes  that  they  very  often  make  money,  for  what 
broker  would  be  so  ungallant  (and  all  brokers  are  gal- 
lant to  the  fair  sex),  as  to  suffer  a  lady  to  lose  money 
in  his  office.  Sometimes  the  broker,  or  operator,  in 
whose  name  these  accounts  stands,  puts  his  shoulder 
under  the  load,  when  a  panic  occurs,  and  saves  his 
lady-customer  at  all  hazards.  Sometimes  he  intro- 
duces her  to  a  magic  ring,  and  she  speedily  becomes 
the  bride  of  fortune.  When  her  margin  is  exhausted, 
she  may  be  said  to  travel  on  a  margin  of  beauty, 
grace,  and  smiles,  which,  with  a  skillful  tear  now  and 


456  INSIDE   LIFE   IN   WALL    STREET^. 

then  dropped,  quickly  subdue  the  hyenas  of  the  street 
and  supply  her  with  the  sinews  of  war  on  'Change. 

It  is  well,  however,  that  women  rarely  come  in  per- 
son into  the  stock-market  to  look  after  their  interests. 
One  can  easily  imagine  the  effect  produced  by  several 
hundred  women  interested  in  stocks,  being  present  at 
a  panic  and  giving  way  with  feminine  impulsiveness 
to  the  feelings  of  the  hour.  We  might  then  expect 
some  new  and  strange  appearances  in  these  disasters. 
A  bevy  of  dames  dissolved  in  tears,  with  hair  dishev- 
eled, and  giving  way  to  hysterics,  or  screaming  like 
"Pythoness  possessed,"  and  slaughtering  stocks  as 
eagerly  as  the  veteran  stock-butchers. 

We  have  answered  the  inquiry,  "  do  women  specu- 
late ?"  and  now  we  ask,  could,  or  would,  or  should,  a 
woman  be  a  broker  ?  Could,  or  would,  or  should,  she 
line  her  delicate  throat  with  bell  metal,  put  triple 
brass  upon  her  face,  change  her  tender  heart  into 
stone,  crush  out  her  human  sympathies  with  the 
unfortunate  and  the  distressed,  and  see  men  reduced 
from  affluence  to  beggary,  and  profit  by  it  as  a  broker  ? 

This  profession  of  a  stock  broker  would  seem  to  be 
almost  the  last  one  that  woman  would  aspire  to  fill, 
or  could  fill  successfully ;  the  recent  dissolution  of  the 
feminine  firm  of  Woodhull,  Claflin  &  Co.,  which  for 
two  years  or  more  did  business  as  stock  brokers  at  44 
Broad  Street,  is  evidence  how  unsuited  to  woman's 
nature  is  such  a  field  of  enterprise. 


CHAPTER  XXX. 

THE  FORTUNES  OF  A  COUNTRYMAN. 

A  Scene  in  a  Broker's  Office— B 1  Has  the  Petroleum  Fever— Blow- 
ing Bubbles  in  Oil — A  Masterpiece  of  the  Engraver's  Art — Ravages 
of  the  Petroleum  Epidemic — The  Mining  Board  and  How  They 
Make  Corners  There — The  Bubble  Breaks,  and  the  "Lobster"  is 

Busted— We  Take    a    Nervine— B 1   Buys   a  Call  in  "Prairie 

Dog  " — II.  G.  Stimpson  and  Billy  Marston  Carry  the  Bears  Up  in  a 
Balloon — Prairie  du  Chien  in  the  Clouds — What  Came  out  of 

B t's  Call— $20,000  Made   from  $200  in  Forty-eight   Hours— 

"Calls  and  Puts"  on  the  Brain— Henry  Keep  Nursing  His  Pet 
Stock— "  Buying  In  Under  the  Rule" — Uncle  Daniel  Says  "We 
Must  Ingine  'em" — The  Story  of  Pacific  Mail — L.  W.  Jerome  Un- 
loading His  One  Hundred  Thousand  Shares — B t's  Luck  in 

Pacific  Mail— He  Takes  a  Flyer  in  Atlantic  Mail  and  then  Buys  One 
Hundred  Erie  of  White  for  Cash. 

IHE  first  scene  in  this  chapter,  is  laid  in  the 
office    of  the    "Lobster."      The   time    is  in 

January,   1865,    while    we,  (E and  I,) 

were  sweating  under  heavy  burdens  of  gold.  "We 
are  sitting  in  the  private  office  of  the  broker  afore- 
said, which  we  made  our  head-quarters,  engaged  in 
our  usual  occupation  of  figuring,  and  perusing  the 
literature  of  the  stock-market,  i.  e.  quotations. 

Enter  a  rustic,  cut  out  on  the  usual  stage  pattern, 
viz. :  tall,  gawkey,  and  eccentric-looking. 

"Ah!"  quoth  E ,  "here  comes  more  tribute  to 

the  Moloch  of  Wall  Street." 

As  he  approached  us,  smelling  strongly  of  the  pine 
28 


460  INSIDE   LIFE    IN  WALL   STKEET. 

woods,  a  shade,  either  of  surprise  or  regret,  passed 
over  the  expressive  features  of  E ,  who  recog- 
nized the  rustic  as  one  of  his  country  relations.  He 

rejoiced  in  the  euphonious  surname  of  B .    After 

the  customary  salutations  had  been  exchanged,  the 
countryman  produced  a  portly  wallet  from  his  breast 
pocket,  and  proceeded  to  rummage  in  its  recesses  for 
certain  documents.  The  first  paper  he  produced 
was  a  certificate  of  good,  moral  character,  from  his 
school-master.  The  second  was  a  certificate  of  the 
deposit  of  $2,300  in  the  bank  of  his  native  village. 
It  need  scarcely  be  remarked,  that  he  found  the  lat- 
ter certificate  much  more  potent  in  Wall  Street  than 
the  former.'  Then  he  produced  half  a  column  cut 
out  of  a  newspaper,  unfolded  it,  and  spread  it  before 
our  eyes.  It  was  headed  thus,  in  very  large  letters, 
PETROLEUM!  and  set  forth  substantially,  that  the 
books  of  the  Sixtieth  National  Petroleum  Company 
were  still  open  for  subscription.  Capital,  one  million 
dollars,  one  hundred  thousand  shares  at  ten  dollars 
par;  that  the  company  had  (magnanimously)  allowed 
the  public  to  take  an  interest  in  the  shares,  by  pay- 
ing $3.00  per  share;  that  the  property  consisted  of 
thirty  acres  in  fee  simple,  in  the  very  center  of  the 
oil  region,  and  only  ten  miles  from  the  celebrated 
Buchanan  Farm;  that  three  wells  were  already  sunk, 
and  ready  for  tubing,  another  down  below  the  first 
sandstone ;  room  for  more  wells ;  every  indication  of 
oil.  A  dividend  of  two  per  cent,  a  month  guaranteed. 
Books  to  be  closed  positively  and  irrevocably  on  the 
21st  instant.  Then  followed  the  names  of  the  di- 
rectors, all  well  known  men  of  business. 

"  Them  air  Petrollum  shares  is  what  I've  come  for. 


BENEVOLENT   BUBBLE-PRICKERS.  461 

Two  per  cent,  a  month  dividends  is  enough  for  me," 
remarked  the  rustic. 

The  glittering  bubble  of  Petroleum  Stock  Com- 
panies had  caught  the  eye  of  B . 

E and  I  had  long  prior  to  this  time  pricked 

our  own  bubbles,  and  thereafter  had  resolved  our- 
selves into  a  vigilance  committee  of  bubble-prickers 
for  the  benefit  of  other  people. 

But  here  was  a  very  obstinate  case.  B had 

resolved  to  invest,  and  in  that  particular  company. 
It  was  only  after  long  argument,  and  by  quoting  to 
him  the  familiar  agricultural  proverb,  "Never  put 
your  eggs  all  in  one  basket,"  that  we  prevailed  upon 
him  to  invest  only  $1,300  in  this  company,  and  keep 
$1,000  for  some  of  the  other  tempting  opportunities 
which  then  abounded  in  the  market.  Then  all  three 
of  us  went  to  the  office  of  the  company,  No.  — 

Broadway,  where  B paid  out  his  $1,300,  and 

received  in  return  certificates  of  four  hundred  and 

thirty- three  shares.  B thought  the  engraving  on 

these  certificates  was  really  beautiful,  and  so  it  was. 
In  the  foreground  was  a  flowing  well,  sending  an  ole- 
aginous jet  one  hundred  feet  or  so  into  the  air,  and 
falling  in  a  graceful  parabolic  curve  into  a  huge  tank 
inscribed  with  the  name  of  the  company,  near  which 
•was  a  pile  of  barrels  apparently  as  large  as  the  pyra- 
mid, of  Cheops.  In  the  background  were  several 
vessels  and  railroad  trains  being  loaded  with  petro- 
leum. B feasted  his  eyes  upon  this  work  of  the 

graver's  art,  and  looked  hopefully  forward  to  his 
guaranteed  dividend. 

The  Petroleum  Stock  Company  fever  raged  for 
nine  months,  and  culminated  in  February,  1865. 


462  INSIDE    LIFE  IN  WALL    STREET. 

Companies  with  a  nominal  capital  of  $300,000,000, 
were  organized  during  that  period.  All  that  has 
been  said  in  our  chapter  on  bubble-companies,  applies 
with  equal  force  to  Petroleum.  A  volume  might  be 
written  to  describe  how  the  English  language  was 
twisted  and  turned,  to  paint  the  prospect  of  for- 
tunes and  avoid  the  legal  liabilities  incident  to  false 
representations;  how  the  bubbles  shone  as  if  col- 
ored with  every  brilliant  dye  that  could  be  ex- 
tracted out  of  Petroleum;  what  engines  were  set 
at  work  to  bring  in  the  public ;  what  stool-pigeons 
were  called  from  the  solid  and  respectable  circles, 
from  the  halls  of  legislation,  from  the  learned  pro- 
fessions, and  from  the  church,  to  entice  dupes,  and 
feather  the  nests  of  needy  adventurers;  how  the 
owners  of  lands  that  smelt  of  oil,  the  mineralogists, 
the  geologists,  and  chemists  were  in  clover,  and  then 
to  tell  how  one  by  one  the  phantom-flowing  wells 
dried  up,  the  magnificent  oil  territory  became  aban- 
doned to  its  original  desolation,  watched  over  only 
by  skeleton  derricks,  while  the  thousands  of  victims 
came  dropping  in,  file  after  file,  to  draw  their 
dividends,  as  the  bubbles  were  bursting.  It  would 
form  a  chapter  in  the  history  of  speculation,  at  once 
interesting,  instructive,  amusing  and  sad. 

The  Petroleum  fever  gave  rise  in  February,  1865,* 
to  the  organization  known  as  the  Petroleum  Stock 
Exchange,  which  however,  died  in  a  few  months  with 
the  fever  which  produced  it,  and  its  remains  were  in- 
corporated with  what  is  now  known  as  the  Mining 
Stock  Board,  another  fragment  hurled  off  from  the 
meteoric  speculation,  in  the  unsubstantial  properties 
incorporated  in  joint  stock  companies. 


RAG,  TAG   AND   BOB-TAIL    EXCHANGE.  463 

This  institution  is  a  miniature  of  the  Stock  Ex- 
change, and  numbers  now  upwards  of  seventy-six 
members.  Here,  on  a  smaller  scale,  corners  are  engi- 
neered, and  close  pools  organized,  which  make  many 
an  outsider  weep  tears  of  gold.  Two  circumstances 
conspire  to  make  these  pools  highly  successful.  First, 
the  general  worthlessness  of  the  stocks  bought  and 
sold  there,  which  tempts  in  short  sellers.  Second,  the 
ease  with  which  stocks  are  manipulated  owing  to  the 
small  amount  of  money  required  to  carry  them,  and  the 
fact  that  they  are  generally  held  in  a  few  hands  after 
the  original  subscribers  have  sold  out  in  disgust,  over 
long  delayed  dividends.  When  three  or  four  men  hold 
all  the  stock  of  one  of  these  companies,  they  can  very 
readily  "milk  the  street"  by  simulating  a  great  ac- 
tivity in  that  particular  stock.  This  is  done  by  what 
is  known  as  "wash  sales,"  i.  e.,  sales  in  which  no 
stock  is  actually  delivered.  A.  pretending  to  sell,  and 
B.  pretending  to  buy,  in  the  open  market  under  a 
secret  agreement.  In  this  way  a  price  is  made,  and 
often  numerous  transactions  are  reported  which  are 
never  really  carried  out.  Of  course  these  fictitious 
sales  are  forbidden  under  penalty  of  expulsion,  but 
are  continually  made  without  any  fear  of  detection. 
As  soon  as  a  stock  is  thus  made  to  assume  an  activity, 
the  outside  public  pricks  up  its  huge  ears  and  listens 
to  the  disinterested  suggestions  of  the  whole  tribe  of 
"pointers,"  "singed  cats,"  and  "ropers-in,"  who  ply 
their  vocation  in  the  stock-market.  If  inclined  to 
buy,  they  take  "jags"  of  the  stock  in  question,  where- 
upon the  price  suddenly  breaks  from  under  them  and 
they  "cut  short"  their  losses  by  selling  in  pursuance 
often  of  the  same  disinterested  suggestions.  Or  per- 


464  INSIDE    LIFE  IN   WALL    STREET. 

haps  in  view  of  the  worthlessness  of  the  stock,  they 
make  short  sales,  when  up  the  price  jumps  and  they 
have  to  "cover"  at  a  heavy  loss.  A  certain  stock, 
the  intrinsic  value  of  which  was  less  than  twenty-five 
cents  a  share,  was  in  1867,  washed  up  to  twenty-five 
dollars  per  share,  catching  a  wealthy  customer  of  a 
prominent  banking  house  to  the  amount  of  forty 
thousand  dollars.  This  movement  was  made  purely 
on  the  strength  of  this  one  short  sale  which  had 
been  made  when  the  stock  was  selling  at  5,  twenty 
times  more  than  its  true  value. 

But  to  return  to  the  fortunes  of  B .  His  indi- 
vidual bubble,  collapsed  in  less  than  five  months,  when 
he  shook  off  the  odor  of  petroleum  from  his  skirts,  by 
selling  his  stock  for  ten  cents  a  share.  Meanwhile, 
he  had  not  lain  upon  his  oars.  His  first  operation 
was  in  gold,  which  he  had  sold  short,  or  as  he  called 
it  "bought  short,"  and  made  $5,000.  Then  he 
mounted  on  the  wave  of  Erie,  which  washed  five 
thousand  dollars  more  into  his  capacious  wallet,  when 
it  broke  at  the  height  of  98.  We  tried  to  release  him 
from  the  claws  of  the  "Lobster,"  when  we  discovered 
his  treachery,  in  buying  in  our  shorts,  but  unfortu- 
nately B had  bought  Erie  at  96,  and  now  that  it 

had  fallen  back  to  90,  he  preferred  keeping  his  po- 
sition on  the  "Lobster's"  books. 

We  lost  sight  of  him  for  three  months,  until  one 
day  in  November,  when  he  rushed  into  our  new  head- 
quarters, crying  out,  "The  Lobster  has  busted,  and 
I'm  busted." 

He  had  just  $200  remaining  out  of  his  $11,000. 
It  was  a  vile  day  in  November,  1865.  The  air  was 
chill  and  muggy,  the  pavement  had  broken  out  into 


A  SAD  SEEKER  AFTER  SOLACE.        465 

a  cold  perspiration,  and  the  buildings  were  covered 
with  damp  blotches.  Everybody  looked  blue,  and 

B 's  face  was  the  longest  and  bluest  of  all.  He 

looked  as  if  a  little  stimulus  would  help  him. 

"  Come  and  get  a  nervine,  B !  " 

"A  nervine!  what's  a  nervine?"  said  B . 

"  Come  and  see." 

We  went  to  the  neighboring  chateau  of  Lorenzo 
Delmonico,  sat  down  at  one  of  the  tables,  hailed  a 
sombre-looking  Ganymede,  who  looked  as  if  he  might 
be  the  grandson  of  some  old  French  soldier,  who 
went  through  Napoleon's  Russian  campaign,  and  had 
his  nose  frozen  therein,  and  requested  him  to  bring 
three  nervines.  This  singular  beverage  is,  by  a  pleas- 
ing fiction,  made  out  to  be  compounded  of  decoctions 
of  roots  and  herbs,  gathered  by  Indian  squaws,  in  the 
vicinity  of  .Baffin's  Bay,  when  the  moon  is  at  the  full, 
and  blended  "judgmatically"  with  the  fluid  known 
to  chemists  as  C*  H6  0',  but  more  generally  recognized 
under  the  name  of  alcohol.  During  the  percolations 

and  genial  glow  diffused  by  this  beverage,  B 

opened  his  stiffly  starched  shirt-bosom,  and  showed 
us  the  fox  gnawing  at  his  financial  entrails. 

B had  borroioed  money  from  friends  in  his 

native  village  in  order  to  meet  the  demands  of  the 
rapacious  Lobster  for  more  margin.  This  obligation 
weighed  heavily  upon  his  spirits,  for  he  had  not  yet 
learned  the  Wall  Street  art  of  bearing  with  an  air 
of  graceful  unconsciousness  a  vast  burden  of  debt. 

While  he  was  bewailing  his  sad  condition,  C ,  a 

well-known  operator,  joined  us  in  the  most  joyous  of 
moods,  inasmuch  as  he  had  made  that  morning  $5,000 
on  Prairie  du  Chien,  which,  after  rising  to  par,  had 


466  INSIDE    LIFE    IN   WALL    STREET. 

fallen  back  to  91.  C was  a  bear  in  Prairie  du 

Chien.  He  predicted  that  it  would  sell  at  50  inside 
of  a  week,  and  volunteered  to  sell  calls  in  it  at  110, 
and  which  should  run  deliverable  at  any  time  within 
thirty  days. 

B 's  face  brightened.  He  plucked  C -  by 

the  sleeve,  and  told  him  he  would  give  him  two  hun- 
dred dollars  for  a  call  of  two  hundred  shares.  C 

filled  one  out,  signed  it,  sent  it  in  to  his  broker,  who 

guaranteed  it,  and  handed  it  to  B ,  who  completely 

emptied  his  pockets  by  giving  C the  $200  agreed 

upon.  The  precious  little  memorandum  was  folded 

by  B into  a  wad  small  enough  to  be  enclosed  in 

a  filbert  and  hidden  in  the  most  secret  compartment 
of  his  wallet.  Then  he  retired  to  his  boarding-house 
to  "  recooperate,"  as  he  expressed  it. 

November,  1865,  was  made  memorable  in  the  his- 
tory of  Wall  Street,  as  all  my  readers  will  recollect, 
by  the  Prairie  du  Chien  combination.  The  leader  in 
this  enterprise  was  H.  G.  Stirnpson,  a  tall,  taciturn 
man,  with  a  face  as  if  cut  out  of  yellow  sandstone, 
and  seeming  to  wear  a  look  which  says,  "  I  am  never 
to  be  bluffed."  His  lieutenant  was  William  H.  Mars- 
ton,  commonly  known  in  the  market  as  Billy  Marston, 
a  portly  gentleman,  with  a  twinkling  eye  and  great 
fondness  for  bidding  up  stocks  five  per  cent,  at  a  leap. 

These  were  the  two  conspirators,  who  in  the  sum- 
mer and  autumn  of  1865,  did  with  pecuniary  intent, 
and  contrary  to  the  peace  of  Wall  Street,  and  all  the 
bears  therein  and  thereunto  appertaining,  buy  and 
take  unto  themselves,  all,  or  nearly  all,  that  certain 
stock,  known  as  Prairie  du  Chien,  otherwise  Prairie 
Dog. 


A   TIME   FOR   TEARS.  467 

It  was  not  a  heavy  burden,  for  there  were  only 
twenty-nine  thousand  and  some  odd  shares  of  the 
stock  to  be  handled.  During  the  Ketchum  break  in 
August,  its  price  was  33.  Within  less  than  three 

months,  and  on  that  Saturday,  when  B bought 

a  call,  it  had  risen  to  par.  On  the  following  Monday 
it 'sold  from  125  to  250,  in  twenty  minutes,  amid  the 
fiercest  excitement  ever  known  before  in  the  Brokers' 
Board.  On  that  day  could  have  been  seen,  the 
singular  spectacle  of  brokers  shedding  tears  over 
their  own  losses,  and  strange  to  say,  over  those  of 
their  customers.  Here,  too,  should  be  recorded,  an 
instance  of  generosity  on  the  part  of  Stimpson,  the 
pool-leader.  He  gave  to  his  customers  who  had  been 
unfortunate  in  previous  operations,  an  interest  in  the 
pool,  and  enabled  them,  in  this  way,  to  recover  their 
losses.  This  is  a  bright  example,  shining  out  of  that 
dreary  waste  of  selfishness — Wall  Street. 

B ,  worn  out  by  his  labors  and  losses,  slept  late 

on  that  black-bear  Monday,  and  when  he  reached  the 
lobby  of  the  Brokers'  Board,  Prairie  du  Chien  had 
just  struck  200. 

His  face  grew  white  with  joy.  With  hands  that 
trembled  with  eagerness,  he  fumbled  once  more  in 
his  wallet,  brought  forth  his  precious  "call,"  sent  it 
into  the  board  to  his  broker,  and  in  three  minutes  he 
had  sold  the  two  hundred  shares  at  210.  In  ten 

minutes  more  he  u  called  "  upon  C ,  who  bought 

the  stock  at  225  and  delivered  to  the  party  to  whom 
B 's  two  hundred  shares  had  been  sold. 

B 's  $200  had  in  forty-eight  hours,  swelled  to 

$20,000. 

It  was  natural  after  this  happy  event,  that  "  calls 


468  INSIDE    LIFE    IN   WALL    STREET. 

and  puts"  should  run  like  a  silver  thread  through  the 

tangled  skein  of  B 's  existence.  He  wound  his 

way  through- the  mazes  of  the  "street,"  hunting  for 
them  as  if  they  were  so  much  game,  until  one  fine 
day  in  February  he  heard  that  Henry  Keep,  sur- 
named  the  "Silent,"  was  selling  calls  in  Old  Southern 
on  the  most  favorable  terms.  Our  hero  snatched 'at 
this  opportunity  as  a  pike  bites  at  a  shiner.  In  due 
time  he  had  hidden  in  his  wallet,  calls  for  five  hundred 
Old  Southern,  duly  signed  by  Henry  Keep. 

This  celebrated  stock  magnate  had  taken  hold  of 
his  pet  stock  in  January,  and  was  brewing  a  cup  of 
"cold  poison"  to  put  to  the  lips  of  the  bears  who 
were  then  dancing  Juba  in  their  Wall  Street  garden, 
for  stocks  were  tumbling  on  every  side. 

When  these  ursine  individuals  heard  that  Keep  was 
selling  calls  in  Old  Southern  at  a  price  slightly  above 
the  market,  they  reasoned  that  Keep  was  not  such  a 
fool  as  to  sell  calls  on  Old  Southern,  if  it  were  going 
to  rise.  They  accordingly  bought  the  calls  and  used 
them  as  a  margin  to  sell  short.  This  was  exactly 
what  Keep  desired,  and  he  succeeded  thus  in  pro- 
curing a  large  short  interest  in  the  market,  while  Old 
Southern  danced  swiftly  upwards. 

After  a  time  and  when  the  price  had  risen  suffi- 
ciently, it  was  announced  that  Keep  was  selling 
"puts,"  also  on  the  most  favorable  terms.  Then  the 
bulls  bought  these  puts  and  used  them  as  margins 
to  buy  Old  Southern.  In  this  way  he  stiffened  the 
price  in  a  double  ratio,  first,  by  inducing  short  sales 
at  a  low  price,  and  second  by  inducing  purchases  at 
a  high  price. 

Then  he  put  on  the  screws.     Two  hatchet-faced 


THE  OLD  BEAR  IN  A  TRAP.         469 

brokers  in  the  regular  board,  and  two  bullet-headed 
brokers  in  the  open  board,  to  whom  the  task  had 
been  delegated,  stood  by  the  levers,  turned  the  screws, 
and  squeezed  the  bears  as  in  a  hydrostatic  press. 
"  Their  silver  skins  were  laced  with  their  golden 
blood,"  while  their  growlings  shook  the  massive  walls 
of  the  new  Stock  Exchange.  When  they  were  ob- 
stinate, the  order  went  forth  to  "  buy  them  in  under 
the  rule."  Whereupon  the  stentorian  voice  of  the 
vice-president  was  heard  proclaiming  that  he  had 
been  directed  by  the  brokers  of  Keep  to  buy  in  for 
the  account  of  John  Doe,  Richard  Roe,  etc.,  etc.,  so 
many  shares  of  Old  Southern  to  complete  their  con- 
tracts." "  What  is  it  offered  at,  gentlemen  ?  I  will 
give  98  for  one  thousand  shares,  99,  100,  101,"  at 
which  last  named  price  he  bought  the  stock,  and 
thus  compelled  the  recusant  bears  to  cover  their  con- 
tracts. While  the  stock  was  thus  selling  for  101 
cash,  it  was  offered  at  94  regular,  i.  e.,  deliverable 
next  day,  and  at  86,  seller  three,  i.  e,,  deliverable  at 
the  option  of  the  seller  within  three  days.  Such 
is  the  magic  worked  by  rings. 

Among  the  herd  so  neatly  caught  that  day,  there 
was  no  one  who  roared  so  loudly  with  pain  as  Uncle 
Daniel.  He  had  agreed  to  deliver  two  thousand 
three  hundred  shares,  at  a  price  twenty-five  per  cent, 
lower  than  the  then  price,  and  now  thought  $50,000 
"  a  good  deal  of  money  "  to  pay  for  the  amusement 
of  selling  short.  His  broker,  D.  G came  to  in- 
form him  that  the  stock  would  be  bought  in,  unless 
he  "came  to  time."  The  old  man  sat  in  his  easy 
chair,  with  a  most  lugubrious  face.  After  rumina- 
ting upon  the  situation  for  a  moment,  he  replied, 


470  INSIDE    LIFE  IN   WALL   STREET. 

"we  must  ingine  'em,  we  must  ingine  'em."  (Ingine, 
Drew-anglice  injoin.)  He  did  ingine  'em.  A  tem- 
porary injunction  was  granted  by  a  justice  of  the 
Supreme  Court,  forbidding  the  president  of  the  Board 
of  Brokers  from  buying  in  two  thousand  three  hun- 
dred shares  of  Old  Southern,  for  S— — ,  C &  Co., 

the  brokers  from  whom  it  had  been  borrowed.  But 
this  did  not  save  Uncle  Daniel,  for  his  own  broker 
took  the  responsibility  of  buying  in,  and  delivering 
the  stock,  very  much  to  the  disgust  of  the  old  man. 
"We  must  ingine  'em,"  has  ever  since  been  one 
of  the  jokes  of  the  street.  It  was  Uncle  Daniel 
who  inaugurated  that  system  of  injunctions,  which 
has  played  so  important  a  part  in  the  tactics  of  the 
stock-market,  for  the  past  four  years.  As  our  hero 
had  not  yet  learned  the  art  of  selling  stock  on  calls, 
as  a  margin,  he  simply  held  his  call  for  five  hundred 
shares,  and  when  it  touched  98,  he  called,  received 
the  stock,  sold  it  for  cash  at  100,  and  made  a  profit  of 

$12,000. 

"Bless  thee,  Bottom!  thou  art  translated." 

For  the  first  time  since  his  entrance  into  the  stock- 
market,  he  burst  through  his  outer  integuments,  shone 
forth  in  all  the  glory  of  the  tailor's  art,  and  sought  the 
fellowship  of  capitalists.  Good  clothes,  and  $30,000 
were  all  the  passports  needed,  and  he  soon  made  the 

acquaintance  of  H ,  who  told  him  the  wondrous 

story  of  Pacific  Mail.  Pacific  Mail  has  been  by  turns, 
the  great  yellow  Chinese  dragon  of  the  stock-market ; 
now  flying,  with  its  courageous  riders,  to  the  highest 
peaks  of  fortune,  and  now,  like  the  bears  of  the 
Himmalaya  Mountains,  rolling  down  from  crag  to 
crag,  amid  the  consternation  of  its  holders. 


JEROME   AND   PACIFIC   MAIL.  471 

For  fourteen  years,  from  1850  to  1864,  it  had 
been  twisting  and  twirling,  shooting  upwards  and 
flying  downwards,  dizzying  the  brain,  piling  up,  or 
scattering  riches,  and  driving  to  suicide  the  men 
who  dealt  in  it.  Then  for  two  years  it  moved  up- 
wards, with  periodic  and  tremendous  strides.  In 
1865,  its  capital  was  increased  from  four  to  ten 
millions,  and  still  the  price  stood  at  240.  In  1866, 
the  capital  was  further  increased  to  $20,000,000, 
an  assessment  of  $3,000,000  was  levied  on  the 
stock-holders,  and  dividends  made  in  full  paid  scrip 
to  the  amount  of  $7,000,000.  Even  then,  the  price 
stood  at  180,  while  the  assets  of  the  company  were 
reported  at  $34,000,000.  He  who  had  bought  at 
par  in  1862,  and  had  held  his  stock  till  the  au- 
tumn of  1866,  would  have  made,  by  selling  his 
stock,  including  the  regular  yearly  dividends  of 
twenty  per  cent.,  a  profit  of  over  nine  hundred  per 
cent. 

Brown  Brothers  &  Co.,  the  trustees  of  the  pool 
described  in  our  ninth  chapter,  held,  in  the  autumn 
of  1866,  one  hundred  and  thirty  thousand  shares  for 
the  benefit  of  the  combination. 

L.  W.  Jerome,  the  "  superb,"  now  made  one  of  his 
great  operations.  He  contracted  with  the  pool  for 
the  sale  to  him  of  one  hundred  thousand  shares,  at 
about  twenty  per  cent,  below  the  market  price.  This 
huge  block  amounting  in  its  market  value  to  nearly 
$20,000,000,  Jerome  proceeded  to  unload  upon  the 
shoulders  of  the  "street,"  by  selling  it  in  the  form 
of  sellers'  options,  or  borrowing  other  stock  for  deliv- 
ery, in  this  way  creating  the  impression  that  he  was 
a  short  seller.  The  sharp  ones  thought  they  had 


472  INSIDE    LIFE   IN   WALL    STREET. 

caught  him  this  time,  and  snapped  greedily  at  the 
supposed  short  sales. 

Now,  in  order  to  clear  himself,  Jerome  would  have 
to  sell  his  stock  at  about  145.  A  large  portion  of  it 
he  actually  succeeded  in  working  off  at  higher  figures. 
But  the  autumn  report  of  the  company  marked  down 
their  assets  to  $22,000,000.  This  showed  .the  in- 
trinsic value  of  the  stock  to  be  110. 

The  buyers  of  the  Jerome  stock  at  170  now  began 
to  open  their  eyes.  Just  after  this  came  the  great 
depression  of  the  winter  of  1867,  resulting  from  the 
contraction  of  the  legal-tender  currency  to  the  extent 
of  $28,000,000.  The  irrevocable  stock-power  held 
by  Brown  Bros,  was  released,  and  Pacific  Mail  stock 
came  on  the  market  in  a  deluge.  The  price  fell  in  a 
few  days  from  163  to  115.  Jerome's  losses  were 
estimated  at  $800,000.  Subsequently,  the  pool  re- 
leased him  from  his  contract  to  the  extent  of  forty 
thousand  shares,  and  once  more  he  "  came  up  to 
scratch  smiling,"  as  they  would  say  in  the  language 
of  the  prize  ring. 

The  same  blow  which  felled  Jerome,  the  financial 

giant,  also  struck  hard  upon  B ,  our  bucolic 

pigmy. 

Attracted  by  H 's  brilliant  story  of  the  fortunes 

won  in  Pacific  Mail,  he  took  four  hundred  shares  at 
175,  and  put  up  60  per  cent,  margin.  This  time,  as 
he  expressed  it,  he  had  «a  dead  open  and  shut 
thing."  "Sixty  per  cent.,"  said  he,  "is  certainly  a 
judicious  and  ample  margin."  And  so  it  would  have 
been  on  every  stock  except  Pacific  Mail. 

In  thirty  days,  B 's  "judicious  and  ample  mar- 
gin" was  wiped  out,  and  in  order  to  prevent  any 


BROKEKS    AND    THEIR    CUSTOMERS.  473 

further  loss,  he  sold,  at  the  suggestion  of  his  panic- 
smitten  broker,  at  the  lowest  cash  price,  his  four  hun- 
dred shares,  with  a  loss  of  $24,000. 

Why  didn't  B draw  out  his  $30,000,  invest  it 

in  Five-twenties,  and  retire  to  his  native  village  con- 
tent with  his  competency? 

Operators  never  do  draw  out  their  money,  at  least 
novices  do  not,  so  far  as  we  have  heard.  They  coine 
into  the  street  with  the  intention  of  making  five  or 
ten  or  twenty  thousand  dollars,  which  having  been 
done,  they  say  they  will  draw  out  their  profits  and 
retire.  But  they  don't.  Their  broker  blandly  hovers 
over  and  guards  their  precious  little  piles  for  himself. 
He  inquires  in  an  insinuating  voice,  just  as  he  is  go- 
ing to  the  board,  whether  his  customer  "  has  anything 
to  say."  The  customer  generally  has  something  to 
say  in  the  shape  of  an  order  to  buy  or  sell,  and  then 
in  five  minutes  or  thereabouts,  he  finds  his  pile  is 
locked  fast  as  a  margin  in  the  fond  embrace  of  his 
broker,  who  sits  over  it  and  feeds  upon  it  till  what 
with  interest,  commissions,  turns,  losses,  etc.,  the 
precious  little  pile  dwindles,  and  finally  either  disap- 
pears into  the  broker's  till,  or  is  sprinkled  upon  the 
tails  of  innumerable  "kites"  and  flyer?. 

B for  a  month  was  lost  amid  the  "  awful  soli- 
tude "  of  his  native  forest,  and  then  returned  scintil- 
lating with  speculative  enthusiasm.  His  pile  was 
only  $5,000  now,  but  by  a  series  of  lucky  turns,  he 
had  in  eight  months  swelled  it  to  $13,000.  It  was 
upon  the  very  day  that  his  broker's  account-books 
disclosed  to  him  this  pleasing  fact,  that  he  run  across 

H the  veracious  historian  of  Pacific  Mail,  who 

gave  him  a  "point"  smoking  hot,  from  the  forge  of 


474  INSIDE    LIFE   IN   WALL    STREET. 

a  ring.  This  "point"  was  respecting  Atlantic  Mail, 
another  famous  steamship  stock.  As  its  price  had 
fallen  twenty  per  cent.,  and  now  stood  at  93,  it 

looked  to  B reasonable  to  operate  in  it  for  a  rise. 

He  bought  a  hundred  shares,  and  as  he  remarked  at 
the  time,  "Success  in  Wall  Street,  is  purely  a  ques- 
tion of  stamps,"  he  deposited  seventy  per  cent,  mar- 
gin, i.  e.  $7,000  on  this  purchase. 

But  as  ill-luck  would  have  it,  Atlantic  Mail  began 
to  drop  that  very  day ;  it  hung  at  87  for  a  few  more 
days,  and  then  broke  in  one  hour  sixty-four  per  cent. 

downwards  till  it  struck  23.  Of  course  B now 

sold  his  stock  at  the  lowest  price.  Men  always  do 
under  such  circumstances. 

Our  unfortunate  hero,  after  this  last  calamity,  re- 
tired forever  from  the  field  of  stock-speculation,  with 
$2,500,  just  $200  more  than  he  had  brought  down  in 
his  original  certificate  of  deposit. 


CHAPTER  XXXL 
WOODWARD,  FISK  JK,  GOULD. 

The  New  Race  of  Financiers— W.  S.  Woodward— His  Portrait,  Char- 
acter and  Fortunes — The  Ulysses  of  the  Stock-market— His  Wealth 
—James  Fisk,  Jr.— A  Theatrical  Character— His  History  and  Ante- 
cedents— His  First  Appearance  in  the  Street — A  Funny  Man — 
Anecdotes— Scenes  in  His  Life — Jay  Gould's  Portrait — Erie  Under 
the  Care  of  Drew — The  Marston  Pool— Uncle  Daniel  Cornered — 
He  Makes  Terms  and  Revenges  Himself  on  the  Cornerers — New 
Chapters  of  Erie — The  Market  Crowded  with  Losers — Drew  and 
Vanderbilt  Take  all  Their  Money — An  Original  Opinion  Respecting 
Vanderbilt  and  Drew — Drew  Throws  Dirt — Fortunes  of  M . 

\ 

(ROM  1862  till  1866,  the  ground  shook  with 
the  tread  of  the  new  race  of  financiers  who 
came  filing  into  the  stock-market.  As  the 
foremost  retired  with  the  spoils  of  their  campaigns, 
or  routed  and  disheartened  to  sleep  the  last  long  sleep 
after  their  "life's  fitful  fever,"  fresh  men  stepped  in 
and  filled  or  more  than  filled  their  places. 

W.  S.  Woodward  was  for  eight  years  one  of  the 
most  prominent  of  the  class  of  stock  speculators.  It 
would  be  hard  to  mention  a  leading  railroad  stock 
that  did  not  feel  the  effect  of  his  strong  manipulations. 
Erie,  Pittsburg,  Reading,  New  York  Central,  Old  South* 
era,  and  more  lately  Rock  Island,  have  been  favorites 
in  the  repertoire  of  this  noted  operator,  and  an  account 
of  the  cliques  and  corners  he  has  organized  would  fill . 
a  volume,  which  could  with  truth  be  entitled  "The 


476  INSIDE   LIFE   IX   WALL    STREET. 

Speculator."  A  short,  quiet-looking  gentleman,  with 
an  assiduous  air,  a  dark  eye,  a  face  moulded  into  a 
fixed  expression  of  solicitude,  he  hardly  looked  the 
daring  and  incessant  speculator  that  he  was.  His  rep- 
utation and  credit  as  a  business  man  stood  high  on  the 
books  of  the  stock  mart. 

His  career  was,  speaking  commercially,  a  most 
chequered  one.  If  any  man  deserve  the  epithet  of  the 
Ulysses — the  much-enduring  man  of  Wall  Street,  it  is 
Woodward.  He  has  wandered  about  that  treacherous 
sea  for  many  years,  been  shipwrecked  on  its  desert 
islands,  threaded  the  narrow  channel  between  Scylla 
(panics)  and  Charybdis  (corners),  visited  the  cave  of 
the  Cyclops  (Polyphemus  Vanderbilt),  heard  the  Sirens 
sing  (Uncle  Daniel  and  his  Chinese  Lyre),  sojourned 
among  the  Lotus  Eaters  (in  a  dull  market),  and  feasted 
in  the  gardens  of  Alcinous  (Rock  Island).  Like  the 
Homeric  hero,  however,  he  always  comes  out  right. 
Drew  has  hammered  him  upon  his  anvil,  and  the  Com- 
modore has  hoisted  him  skywards  with  most  Olympian 
kicks,  but  he  seems  to  have  as  many  lives  as  a  cat. 
When  short  of  stocks,  he  has  been  twisted  by  the  bulls 
up  long  spiral  shafts,  and  flattened  like  a  pancake 
against  the  iron  dome  of  a  rampant  market;  when 
long  of  stocks,  he  has  (speaking  in  the  same  figurative 
manner),  time  and  again  been  thrown  by  the  bears  out 
of  six-story  garret  windows,  with  nothing  to  break  his 
fall  but  an  India  rubber  credit,  but  like  his  feline  pro- 
totype, he  has  always  alighted  on  his  legs  and  "  sailed 
in"  once  more,  as  if  nothing  killing  had  happened. 

In  the  summer  of  1863,  his  contract  was  said,  in  the 
street,  not  to  be  worth  fifty  dollars.  In  1870,  his  ex- 


ANECDOTES    OF   FISK.  477 

chequer  was  rated  at  from  two  to  four  millions.  In 
1871  he  failed  with  liabilities  of  from  one-and-a-half 
to  two  millions  greater  than  his  assets,  and  he  has  from 
that  time  ceased  to  be  a  power  in  the  market 

"  Look  here  upon  this  picture  and  on  this." 

What  portraits  could  be  more  unlike  than  that  of 
the  dark,  still,  care-laden  Woodward,  and  the  blonde, 
bustling  and  rollicking  James  Fisk,  Jr.,  who,  in  1865, 
came  bounding  into  the  Wall  street  circus,  like  a  star- 
acrobat,  fresh,  exuberant,  glittering  with  spangles,  and 
turning  double  summersaults,  apparently  as  much  for 
his  own  amusement,  as  for  that  of  a  large  circle  of 
spectators.  He  was  first,  last,  and  always,  a  man  of 
theatrical  effects,  of  grand  transformations,  and  blue 
fire.  All  the  world  was  to  him  literally  a  stage,  and 
he  the  best  fellow  who  shifted  the  scenes  the  fastest, 
danced  the  longest,  jumped  the  highest,  and  raked  the 
biggest  pile. 

His  whole  business  career  was  a  series  of  scenic  hits 
and  stage  metamorphoses.  His  first  appearance  was 
as  the  Prince  of  Peddlers  in  Ne\v  England.  His  wagon 
was  magnificent ;  his  four  horses  sleek  and  mettlesome. 
At  different  points  in  his  triumphal  progress  through 
the  rural  districts,  he  was  met  by  a  train  of  his  subal- 
terns, who  filled  the  sheds  of  the  country  inns  with 
their  wagons,  held  audience  with  their  chief,  and 
obeyed  his  orders.  His  next  appearance  was  as  a  dry 
goods  merchant,  a  member  of  the  well-known  house  of 
Jordan,  Marsh  &  Co.  Then  quickly  the  scene  changes 
once  more,  and  he  looms  up  as  a  stock-broker  in  New 
York,  with  a  capital  of  §64,000,  the  profits  of  his 
season  at  merchandise.  His  office  in  Broad  Street  was 


478  INSIDE   LIFE   IN   WALL    STREET. 

a  banqueting  hall,  in  which  he  presided  over  tables 
which  groaned  daily  with  the  most  sumptuous  lunches. 

From  this  point  of  time  (1865)  there  had  always 
been  in  the  turbulent  stream  of  Erie  an  undercurrent 
and  an  upper  whirl  of  James  Fisk,  Jr.  Uncle  Daniel 
welcomed  him  (or  perhaps  we  should  say  his  bank 
account),  patted  him  upon  the  back,  indoctrinated  him 
into  the  mysteries  of  pools  (of  course  always  in  Erie), 
gave  him  a  paternal  hug,  during  which  James  saw  his 
pile  growing  small  by  degrees  and  beautifully  less ; 
and  early  in  1868,  as  he  told  a  friend,  he  was  not 
worth  a  dollar  in  the  world. 

Six  month?  after  this  the  scene  changed  again,  with 
much  rumbling  and  the  shifting  of  blazing  and  many- 
colored  lights,  and  he  stood  forth  with  a  million  dol- 
lars at  his  bankers,  the  high  comptroller  of  Erie,  a 
general  theatrical  manager,  a  steamboat  potentate ; 
in  fact,  Prince  Erie  James  Jubilee  Admiral  James  Fisk, 
Jr.  Now  the  scenes  shift  swiftly — the  eye  can  hardly 
follow  them — first  to  Wall  Street,  where,  to  use  his 
own  words,  "he  made  Rome  howl"  in  the  Erie  ring  of 
November,  1868 ;  then  to  the  courts ;  then  to  the 
office  of  the  Union  Pacific  Railroad  Company,  amid 
the  hammering  in  of  great  Salamander  safes  with  pon- 
derous sledges ;  then  back  to  Wall  Street,  amid  the 
growlings  of  a  thousand  bears  and  the  bellowings  of 
As  many  bulls,  in  the  great  gold  ring  of  September, 
1869 ;  then  in  the  courts  once  more,  tampering  with 
the  Commodore's  iron  chest,  all  the  while  the  voices  of 
his  enemies  raining  odium  and  curses  upon  him,  which 
fell  off  like  water  from  a  duck's  back  as  he  drove  on 
his  dozen  teams,  railroads,  steamboats,  theaters,  pools, 


RAILWAY  ENGINEER  AND  STOKER.      479 

contracts,  political  combinations,  etc.,  etc.,  as  impertur- 
bable as  a  faro-croupier,  and  as  "  cool  as  a  couple  of 
summer  mornings." 

Boldness !  boldness !  twice,  thrice,  and  four  times. 
Impudence,  cheek  !  brass !  unparalleled,  unapproach- 
able, sublime ! 

Perhaps  the  strong  point  of  this  man  was  his 
physique,  so  robust,  so  hale,  so  free  from  the  shadow 
of  every  peptic  derangement.  His  boldness,  nerve,  and 
business  capacity,  were  supplied  by  this  physique, 
which  also  supplied  him  with  animal  spirits  beyon4 
measure.  He  was  continually  boiling  over  with  jokes,, 
good,  bad  and  indifferent. 

Once  when  he  and  his  father  were  peddling  goods 
in  New  Hampshire,  an  old  woman  charged  Fisk,  Senior, 
with  having  deceived  her  as  to  the  value  of  a  piece  of 
calico  worth  twelve  and  one-half  cents. 

"Well,  now,"  said  Fisk,  Jr.,  "I  don't  think  father 
would  tell  a  lie  for  twelve  and  one-half  cents,  though 
he  might  tell  eight  of  'em  for  a  dollar." 

He  always  seemed  to  look  upon  his  operations  in 
Wall  Street,  no  matter  how  large  they  may  have  beer?, 
as  a  gigantic,  side-splitting  farce.  After  the  greaj, 

gold  break  of  September,  1869,  one  B ,  a  broker, 

called  upon  him  at  the  Erie  railroad  office,  for  the 
purpose  of  tendering  to  him  $500,000  gold,  which  he 
claimed  to  have  sold  him.  Now,  as  this  amount  of  gold 
would  weigh  something  like  a  ton,  Fisk  was  well  aware 
that  B had  not  brought  it  with  him,  and  there- 
fore the  tender  could  not  be  legal.  So  as  soon  a? 

B stated  what  he  came  for,  Fisk  promptly  replied, 

"  Certainly,  Mr.  B ,  we  will  take  that  gold.  Here, 


480  INSIDE   LIFE  IN  WALL   STREET. 

John  (calling  to  an  attendant),  go  down  and  help  Mr. 

B to  bring  up  his  gold."  Poor  Mr.  B ,  not 

having  brought  his  ton  of  gold  with  him,  could  only 
look  sheepish  and  retire. 

Jay  Gould  was  the  complement — the  foil  of  James 
Fisk,  Jr.  He  is  a  short,  slight  man,  with  a  sable  beard, 
a  small,  bright,  introverted  eye,  and  a  cool,  clear  head. 
His  forte  is  planning,  and  he  represented  the  man  of 
thought,  as  Fisk  did  the  man  of  action,  in  the  firm  of 
Fisk  &  Gould.  He  was  the  engineer,  with  his  hand 
on  the  engine-lever,  while  Fisk  was  the  roar  of  the 
wheels,  the  volume  of  smoke  from  the  stack,  the  glare 
of  the  head-light,  and  the  screaming  whistle  of  the 
locomotive.  We  shall  have  more  to  say  hereafter 
respecting  this  extraordinary  financier.  But  let  us 
return  to  the  stock-market  in  1866  and  1867. 

The  block  of  twelve  thousand  shares  of  Erie,  which 
Daniel  Drew  took  off  the  hands  of  the  luckless 
Ketchum,  from  76  to  80,  served  partly  to  replace  what 
he  had  sold  at  higher  figures,  when  the  price  culmi- 
nated in  July  31,  1865,  and  again  he  proceeded  to 
play  his  new  role  of  bull,  by  hoisting  Erie  to  96, 
again  he  tortured  the  bears  and  bled  them  one  per 
cent,  a  day  for  the  use  of  Erie  stock  to  complete  their 
contracts.  But  it  is  one  thing  to  bid  up  Erie  to  96, 
and  quite  another  to  sell  it  at  that  price.  To  add  to 
Drew's  embarrassment  an  outside  ring  had  bought 
10,000  shares  on  their  own  account  and  were  expecting 
to  throw  this  lot  upon  the  market  after  the  old  man 
had  lifted  the  stock  to  the  selling  point,  and  they  suc- 
ceeded in  selling  it  to  D.  D.  at  95.  The  "street" 


THE   MAESTON   POOL.  481 

would  not  buy  it,  the  public  would  not  buy  it,  and 
Drew  and  his  associates  held  nearly  all  of  the  stock. 

"  Ye  know  not  of  the  ways  I  have, 
I  turn,  and  pass,  and  come  again." 

This  was  his  old  song,  and  he  sang  it  now  in  an 
under-tone,  when  he  recommended  a  friend,  Captain 

H ,  to  buy  a  few  thousand  shares  of  Erie  on  the 

point  that  the  "pool"  would  put  it  higher.  Captain 

H bought  ten  thousand  shares,  but  discovered 

accidentally,  that  this  lot  of  stock  came  from  Drew's 
brokers,  in  fact,  the  old  man  was  selling  the  very  stock 

that  he  had  recommended  Captain  H to  buy. 

The  victim  stopped  the  payment  of  the  check,  kept 
the  stock  and  compelled  Drew  to  cancel  the  bargain. 
Uncle  Daniel  thus  thwarted,  gradually  relaxed  his 
hold  on  Erie,  and  it  dropped  to  56  with  great  loss  to 
the  pool,  assisted  in  its  downward  course  by  the  short 

sales  made  by  D.  D ,  who  once  more  resumed  his 

old  character  of  a  bear. 

It  was  in  the  spring  of  1866,  while  the  market 
was  shuddering  with  the  great  London  panic,  the 
sound  of  which  came  rumbling  along  under  the 
waters  of  the  Atlantic,  into  Wall  Street,  that  a  new 
party  took  hold  of  Erie,  the  same  that  had  so  suc- 
cessfully cornered  Prairie  du  Chien,  in  the  preceding 
November.  William  H.  Marston  was  the  leader  of 
this  new  ring.  The  enormous  short  sales  of  Daniel 
Drew,  and  those  who  sold  under  his  inspiration,  be- 
tween 56  and  65,  enabled  Marston  and  his  associates 
to  obtain  complete  control  of  Erie,  which  by  the 
middle  of  July,  they  had  raised  to  75,  and  once 
again  Drew  found  himself  cornered  quite  to  his  aston- 


482  INSIDE   LIFE   IN   WALL   STREET. 

ishment,  since  he  thought  himself  thoroughly  master 
of  the  situation  in  view  of  a  little  stroke  of  financier- 
ing, which  he  had  plied  with  the  Erie  Railroad  Com- 
pany a  short  time  before.  The  corporation  being 
in  urgent  need  of  money,  had  borrowed  of  him 
$3,500,000,  giving  him  twenty-eight  thousand  shares 
of  new  stock,  and  $3,000,000  in  bonds  convertible  into 
stock,  as  collateral  for  the  loan.  A  part  of  this  collat- 
eral had  been  already  disposed  of  at  lower  prices,  when 
he  found  himself  cornered  as  above  mentioned.  He 
now  foresaw  a  way  by  which  he  could  revenge  him- 
self on  those  who  had  conspired  against  him,  and 
make  up  his  losses.  The  first  step  to  this  way  was 
through  diplomacy.  He  made  terms  with  the  ring, 
and  having  compromised  his  back  contracts,  struck 
hands  with  them  secretly  in  their  scheme  for  putting 
Erie  up.  That  same  day  the  price  was  allowed  to 
drop  ten  per  cent.,  converting  by  these  means  hosts 
of  jubilant  bulls  into  bears;  thereafter  for  two  months 
the  price  was  manipulated  to  work  in  a  large  short 
interest;  then  it  was  jumped  in  swift  leaps  to  97. 

September  was  a  halcyon  month  for  all  the  bulls, 
great  and  small.  Marston,  the  bull-leader,  was  a 
veritable  tycoon  for  a  few  weeks.  The  crowd  of 
those  who  had  suffered  in  the  spring  tumble  and  dur- 
ing the  summer,  had  haunted  the  purlieus  of  the 
Long  Room  in  a  variety  of  doubtful  costumes,  or 
"boozed"  in  the  neighboring  gin-mills,  now  skipped 
gleefully  through  the  halls  of  the  Fifth  Avenue  Ho- 
tel in  gay  attire,  or  sipped  their  champagne  at  Del- 
monico's.  Erie  had  shot  up,  and  stood  towering  like 
some  monarch  of  the  forest;  Billy  Marston  was  seated 
in  a  crotch  of  the  trunk,  his  eyes  twinkling  with 


UNWRITTEN   STORIES.  483 

delight,  the  bright  plumaged  broker-birds  twittered 
on  its  branches,  and  many  a  hungry  operator  was 
plucking  of  its  fruit. 

And  now  the  "old  man"  came  in  the  darkness  and 
cut  down  the  tree,  sent  Billy  Marston  sprawling,  and 
put  to  flight  every  bird  and  beast  which  sat  on  its 
limbs,  then  staggered  away  under  the  burden  of  his 
harvest.  To  return  to  the  language  of  the  matter  of 
fact,  Daniel  Drew  had  sold  twenty  thousand  shares, 
or  thereabouts,  at  summit  prices,  and  thus  took  his 
revenge  by  breaking  the  ring,  besides  pocketing 
$1,000,000  by  the  operation.  Erie  kept  falling  till 
it  reached  52.  This  was  in  the  spring  of  '67.  Then 
commenced  a  new  chapter  in  speculation,  and  cover- 
ing thirty  months  of  time,  and  marked  by  more 
singular  events,  perhaps,  than  ever  occurred  before 
in  the  financial  history  of  this  or  any  other  country. 
Battles  between  the  money  kings ;  the  Courts  of  Law 
and  Legislatures  of  States  ranging  themselves  for  or 
against  the  rival  factions ;  swift  rises,  ruinous  panics, 
all  ending  in  the  aggrandizement  of  the  few  and  the 
impoverishment  of  the  many. 

Daniel  Drew,  Cornelius  Vanderbilt,  and  the  other 
stock  potentates,  stood  all  the  time  in  the  market 
like  so  many  mountains  of  magnet  which  drew  to 
themselves  all  the  metal  out  of  the  pockets  of  thou- 
sands of  lesser  operators.  In  1868  and  1869  the 
street  swarmed  with  men  who  came,  staked  their 
money,  lost,  and  then  vanished,  or  still  haunted  the 
vestibules  of  the  Stock  Exchange,  possessed  by  the 
illusive  hope  of  retrieving  their  fortunes.  The  tales 
that  could  be  told  of  some  of  these  unfortunates 
would  be  as  marvelous,  doleful  and  moving  as  any 


484  INSIDE   LIFE   IN  WALL   STREET. 

romance.  How  they  enlisted  in  the  ranks  of  the 
speculators,  ran  down  through  the  whole  sounding 
scale  of  wealth,  joy,  splendor,  doubt,  disaster,  penury, 
misery,  then  up  again,  and  so  on  to  the  end  of  their 
career.  Such  stories  as  these  often  contain  dark 
secrets,  and  belong  to  the  unwritten  lives  of  those 
men,  only  to  be  told  by  their  close-mouthed  brokers, 
and  those  mysterious  stock-ledgers,  which,  like  dead 
men,  tell  no  tales  of  the  customer,  either  how  he 
made  and  lost,  or  from  whence  he  obtained  his  fresh 
supplies  of  cash  margin,  whether  from  robbing  banks 
or  using  the  funds  of  widows  and  orphans. 

It  will  be  noticed  by  any  one  who  visits  the  mar- 
ket how  greatly  the  unhappy  losers  there  are  given 
to  gossip,  in  which  respect  no  tea-party  of  old  women 
in  a  country  village  can  surpass  them.  They  collect 
in  knots  of  three  or  more  on  the  sidewalk  and  pick 
financial  characters  to  pieces.  They  ventilate  discred- 
itable stories  affecting  the  credit  of  noted  operators ; 
in  fact  they  convert  the  stock-mart  into  a  school  for 
scandal. 

Naturally  the  money  kings  come  in  for  their  full 
share  of  abusive  gossip  from  these  individuals.  Van- 
derbilt,  they  call  a  brigand.  Drew,  a  sneak.  Fisk, 
a  cut-throat,  etc.,  etc. 

In  the  summer  of  1869,  while  E and  I  were 

standing  in  New  Street,  near  the  entrance  to  the 
Long  Room,  our  attention  was  attracted  by  two  sin- 
gular looking  men  who  belonged  to  the  class  above 
described,  and  were  conversing  in  a  style  which  drew 
about  them  a  small  group  of  amused  listeners.  They 
were  giving  their  opinions  respecting  the  Commodore 
and  Uncle  Daniel  with  more  freedom  than  elegance. 


MIXING   LIQUORS    WITH   SPECULATION.  485 

One  of  them  after  asserting  that  it  was  easier  to 
make  money  in  every  business  than  in  stock-specula- 
tion, followed  up  this  proposition  by  announcing  his 
belief  that  the  only  way  to  win  a  fortune  in  stocks, 
was  to  tickle  Vanderbilt  and  Drew,  meaning  thereby 
to  make  ones  self  agreeable  or  useful  to  the  great 
bull  and  bear.  The  idea  of  Cornelius  Vanderbilt  and 
Daniel  Drew  writhing  with  inextinguishable  laughter 
under  the  seedy  operator's  fingers,  as  they  were 
poked  in  among  the  small  ribs,  was  followed  by  a 
burst  of  merriment  from  the  little  audience  who 
seemed  to  thoroughly  appreciate  the  truth  as  well  as 
the  ludicrousness  of  the  remark.  No  doubt  any  one 
who  could  tickle  Vanderbilt  and  Drew  could  make  a 
fortune  by  it,  just  as  one  can  catch  a  bird  if  he  can 
put  salt  on  his  tail. 

The  other  of  the  two  was  a  man,  in  whose  face 
the  comic  and  the  sad  were  strangely  mingled,  though 
on  the  whole  the  comic  predominated.  He  gave  his 
views  of  Daniel  Drew  thus  : 

"  You  see,  boys,  that  Uncle  Daniel,  as  you  call  him, 
(I  wish  he  was  my  uncle,)  is  a  dirt  thrower.  He 
spoils  every  stock  he  touches." 

"How  so?"  inquired  his  auditors. 

"Why!  he  started  in  life  as  a  cattle  drover,  and 
when  his  cattle  didn't  drive  to  suit  him,  he  used  to 
pick  up  mud  and  throw  at  'em  until  he'd  plastered 
'em  all  over,  and  so  when  he  brought  'em  to  market 
they  were  just  one  mass  of  mud  and  filth.  Now 
he  treats  stocks  just  as  he  used  to  treat  cattle,  he 
pens  'em,  drives  'em  up  and  down  the  market,  cor- 
ners 'em;  in  fact,  Daniel  Drew  calls  stocks  his  crit- 
ters and  abuses  'ein  accordingly.  He  waters  'em  and 


486  INSIDE   LIFE   IN  WALL   STREET. 

plasters  'em  all  over  with  dirt  till  they  are  not 
worth  shucks." 

This  original  illustration  of  Drew's  policy  in  de- 
pressing stocks,  led  me  to  inquire  the  name  of  this 
eccentric-looking  individual. 

"I  know  him,"  replied  E ,  "it  is  M ,  one 

of  that  numerous  class  who  have  a  regular  business 
out  of  which  they  make  a  small  fortune  every  year, 
and  then  lose  it  in  stocks." 

"  He  is  a  liquor  dealer,"  continued  E .  "  I  be- 
came acquainted  with  him  in  1860.  His  store,  or,  as 

he  was  pleased  to  call  it,  his  office,  was  in 

street,  close  by  the  Stock  Exchange.  It  consisted  of 
two  floors;  the  ground-floor  was  his  sample-room, 
lined  with  bottles,  having  on  them  the  newest  possi- 
ble of  labels,  bearing  such  nectareous  inscriptions  as 
"London  Cordial,"  "Otard,  1816,"  "  Mountain  Dew," 
"Royal  Lach-na-gar  Whiskey,"  "Milk  of  Kentucky." 
The  cases  of  claret  on  the  floor,  always  looked  as 
though  they  were  fresh  from  the  plane  of  some  car- 
penter in  Greenwich  Street,  or  Manhattan  Alley,  and 
the  corpulent  casks  ranged  in  dignified  rows  along 
the  rear  wall,  reminded  one  of  the  Benzine  Barrel 
Company,  rather  than  of  the  French  coopers  of  Bor- 
deaux. 

The  other  floor  was  the  basement,  and  about  this 
apartment  always  hung  the  odor  of  mystery,  and  of 

a  druggist's  shop,  until  one  day,  paying  M a  visit, 

and  not  finding  him  in  the  sample-room,  I  penetrated 

to  the  subterranean  regions.  There  I  found  M , 

as  busy  as  a  bee,  distilling  honey  out  of  poisonous 
flowers.  He  wore  a  white  apron,  which  bore  a  great 
variety  of  suspicious  stains,  and  was  engaged  in  fill- 


A   CLOSED   SPIGOT   AND   OPEN   BUNG.  487 

ing  bottles  from  a  large  tank.  He  hurried  with  me 
up  stairs,  as  soon  as  he  could  doff  his  apron  and  wash 
his  hands,  but  in  the  brief  survey  I  took  of  his  labo- 
ratory, I  noticed  several  vials  of  oil  of  cognac  for 
manufacturing  brandy  out  of  proof  spirits,  together 
with  various  other  flavoring  essences ;  a  large  bottle 
that  looked  like  tincture  of  logwood ;  jars  of  alum, 
and  sugar  of  lead;  others  which  looked  as  if  they 
might  contain  chrystallized  strychnine;  and  still 
another  labeled  hydrocyan — which  .1  interpreted  to 
be  prussic  acid. 

A  flood  of  light  suddenly  burst  upon  me.  I  had 
often  remarked  diagnostically,  singularly  disagreeable 
sensations,  not  only  in  the  head,  but  also  in  the  stom- 
ach, in  the  morning  after  imbibing  at  M 's  sample- 
room.  I  now  smelt  the  rat,  I  might  almost  say  the 

ratsbane.  M was  a  cotnpounder  as  well  as  a 

seller  of  liquors.  In  the  basement  of  his  store,  he 
mixed  and  manufactured  cordials,  and  various  other 
beverages,  to  suit  the  palate  of  his  customers.  As 
he  informed  me  in  a  moment  of  confidence,  "what 
people  wanted  was  fuddle,  and  he  accordingly  mixed 
his  beverages  with  a  sharp  eye  on  fuddle." 

By  diligence  in  business,  and  by  the  suavity  with 
which  he  commended  his  doses  to  a  bibulous  and  too 
confiding  public,  he  succeeded  in  amassing  about 
$20,000.  This  was  in  1863.  Then  he  looked  about 
him  for  some  judicious  investment  or  other  means 
for  swelling  the  dimensions  of  his  little  pile.  He  did 
not  have  far  or  long  to  look.  Money  could  be  made  (or 
lost)  with  wonderful  speed  in  the  neighboring  stock- 
market.  The  speculative  movements  in  Wall  Street 
had  long  attracted  his  notice,  which  was  kept  alive  by 


488  INSIDE   LIFE   IN  WALL   STREET. 

the  numerous  brokers  and  operators  who  took  their 
arid  lunch  of  crackers  and  cheese  at  noon-day  in  his 
sample-room.  Some  of  them  had  been  customers  for 
years,  and  had  doubtless  consumed  whole  hogsheads 
of  "Mountain  Dew,"  "Milk  of  Kentucky,"  etc.,  and 
thus  created  a  great  activity  in  the  trade  of  poisonous 
drugs  used  in  the  adulteration  of  liquors,  besides  pay- 
ing jvt a  pretty  penny,  to  say  nothing  of  doctors' 

bills.  The  talk  of  M 's  customers  was  of  margins, 

profits,  commissions, "  puts  and  calls."  As  for  the  word 
"profits,"  they  tossed  it  about  in  their  conversation 
with  the  most  enchanting  freedom.  Fifty  thousand 
dollars  was  but  a  drop  in  the  bucket,  and  their  mar- 
ginal notes  and  references  put  all  the  laws  of  legiti- 
mate profits  at  defiance.  Five  thousand  could  be 
made  in  an  hour  by  one  lucky  turn,  and  a  hundred 
thousand  in  a  short  campaign. 

Is  it  any  wonder  that  M should  have  caught 

the  infection,  or  that  the  feu  de  joie  fired  daily  in  his 
presence  should  have  "put  his  soul  in  arms  and  eager 
for  the  fray  ?"  And  so  it  did ;  for  one  fatal  day  he 
found  the  little  fortune  of  $20,000,  which  he  had 
scraped  together,  was  too  hot  to  hold  in  his  pocket. 
A  poetic  and  unconscious  revenge  was  about  to  be 

taken  on  M by  P ,  a  broker  and  his  oldest 

customer,  in  return  for  the  stupefying  and  stomach- 
deranging  draughts  which  he  had  so  often  imbibed 
at  M 's  sample-room. 

The  $20,000  was  deposited  in  P 's  hands. 

A  few  weeks  passed  in  see-sawing  up  and  down 
the  market ;  then  a  bold  dash  at  Harlem  on  the  short 
side,  accompanied  with  a  little  coquetting  with  gold, 
and  M found  his  fortune  had  dwindled  to  $500. 


A   VIBRATORY   LIFE.  489 

P and  his  brother  brokers,  the  customers  of 

M ,  had  unconsciously  taken  a  terrible  revenge 

on  the  unfortunate  sample-room  proprietor,  who 
thereupon  returned  immediately  to  his  unhealthy 
laboratory,  plied  his  trade  with  new  vigor,  and  drew 
to  his  sample-room  large  accessions  from  his  new  ac- 
quaintances of  the  Stock  Exchange.  He  talked 
glibly  in  the  street,  his  nectar-fluids  flowed  in  cata- 
racts, his  office  clinked  with  glasses  as  of  a  chime  of 
bells,  and  a  perpetual  shower  of  fractional  currency 
and  greenbacks,  made  his  counters  verdant  as  the 
herbage  after  a  rain. 

Time  rolled  on,  and  in  twelve  months  he  found 
himself  in  possession  of  $15,000.  This  pleasing  fact 
came  under  his  notice,  wrhen  he  was  taking  account 
of  stock,  April  1st,  1864,  just  when  the  bulls  were 
enjoying  their  spring  carnival,  led  gaily  on  by  their 
dashing  leader,  A.  W.  Morse.  He  drew  out  all  his 
money  from  his  bank,  emptied  his  till  of  its  loose 

change,  and  in  an  hour  was  in  the  office  of  P . 

M 's  customers  welcomed  him  back  to  the  market, 

and  speedily  stuck  him  so  full  of  "points,"  that  his 
head  fairly  bristled  with  them. 

What  it  was  that  finished  him  this  time,  whether 
it  was  that  treacherous  lake,  Erie,  the  tumbling  ram- 
parts of  Fort  Wayne,  or  the  precipices  and  toppling 
crags  of  Galena,  I  cannot  say,  but  on  the  19th  of 
April,  the  day  after  the  great  panic,  he  was  seen 
scudding  under  bare  poles,  in  the  direction  of  his 
chemical  haven. 

"  His  present  status  in  the  stock-market,"  added 

E ,  u  rests  upon  a  slender  margin  of  four  hundred 

dollars,  no  thanks  to  Erie,  or  Daniel  Drew." 


CHAPTER  XXXH. 

THE  BATTLES  OF  THE  GIANTS. 

Vanderbilt  Obtains  Control  of  Central  and  Erie— Drew  to  be  Left  Out 
in  the  Cold— The  Commodore  Warms  a  Viper— Drew  at  his  Old 
Games — The  Opening  of  the  Battle — Injunction  and  Counter- 
Injunction — The  Plot  Thickens — Ten  Millions  of  Fresh  Erie  Saddled 
upon  the  Commodore — Will  he  Break? — Stampede  of  the  Conspir- 
ators—Thunder All  Around— New  York  Central  Hoisted  into  the 
Kain  Clouds,  and  Why— A  Compromise— The  "Old  Man"  Weak 
in  the  Knees — A  Treaty  of  Peace,  its  Terms,  etc. — New  Develop- 
ments— Locking  Up  Greenbacks,  and  Punishing  Drew. 

[HE  wealth  of  the  richest  valley  shone  upon 
by  the  sun — the  valley  of  the  Mississippi  and 
its  tributaries — is  poured  into  the  lap  of  the 
Queen  City  of  America,  through  three  grand  trunk 
railways — the  Pennsylvania  Central,  the  Erie,  and 
the  New  York  Central.  The  first  of  these  lines  long 
since  passed  under  the  control  of  a  combination  of 
wealthy  capitalists.  The  second  had  been  for  ten 
years  previous  to  1867  a  kind  of  stock  ten-pin,  set 
up  and  bowled  down  in  Wall  Street  by  Daniel  Drew 
and  his  associates;  while  the  third  had  for  many 
years,  prior  to  the  year  1865,  been  supposed  to  be 
under  the  control  of  the  Albany  Regency  as  a  part 
of  their  political  machinery.  * 

Cornelius  Vanderbilt,  in  1864,  took  possession  of 
the  Harlem  &  Hudson  lines,  two  mouths  of  one  of 
these  trunks.  The  next  step  in  his  programme  was 


SHORT  COMMONS  FOR  AN  OLD  BEAR.     491 

to  secure  the  control  of  the  trunk  fed  by  these 
mouths,  viz.:  the  New  York  Central.  But  this  could 
not  be  done  without  a  struggle.  His  earliest  attempt 
to  obtain  his  object  was  a  failure.  Henry  Keep,  his 
antagonist  in  the  first  onset,  triumphed,  and  in  1866 
was  chosen  president  of  the  company.  But  Henry 
Keep  had  merely  certain  ends  of  his  own  to  subserve 
in  becoming  president  of  the  New  York  Central ;  and 
when  these  ends  had  been  subserved,  he  retired  from 
the  position.  The  way  was  then  open  for  a  new 
campaign,  which  Vanderbilt  speedily  undertook,  and 
in  1867  he  had  secured  the  prize.  He  was  master 
now  of  Hudson,  Harlem  and  Central. 

The  next  move  was  upon  the  works  of  Erie,  the 
only  other  competing  line  which  it  was  possible  for 
him  to  obtain  control  of.  In  the  summer  of  1867, 
Vanderbilt  and  his  friends  had  secured  a  majority  of 
the  Erie  stock,  and  were  about  to  elect  a  new  board 
of  directors,  in  which  Daniel  Drew's  name  was  not  to 
appear. 

To  throw  Daniel  Drew  out  of  the  Erie  board  would 
be  like  skinning  the  bear,  or  plucking  the  plumage 
from  the  peacock;  it  would  strip  the  "old  man"  of 
his  prestige,  deprive  him  of  his  bread  and  butter,  and 
send  him  forth  to  wander  in  desolation  through  the 
stock-market. 

Daniel  Drew  felt  the  iron  enter  his  soul  at  this 
prospect,  and  threw  himself  in  supplication  at  the 
feet  of  Cornelius  Vanderbilt,  who  was  moved  by  the 
spectacle,  and  comforted  the  old  bear.  A  compro- 
mise was  made,  and  early  in  the  fall  of  1867,  Daniel 
Drew  was  allowed  to  come  into  the  combination  as  a 
director,  and  the  treasurer  of  the  Erie  Railroad  Com- 


492  INSIDE    LIFE  IN   WALL   STEEET. 

pany.  Daniel  Drew  could  no  more  refrain  from  play- 
ing his  old  games  in  Erie,  than  the  veteran  gamester 
can  withold  his  hand  from  cards  and  dice.  It  Avas 
play  to  him,  but  death  to  others.  He  intrigued  to 
enlist  in  his  schemes,  the  most  active  and  able  of  the 
board  of  directors,  and  in  January,  1868,  they  were 
with  him  in  furthering  these  schemes. 

A  pool  in  the  Vanderbilt  interest  was  then  engaged 
in  engineering  a  rise  in  Erie,  and  the  street  was  full 
of  rumors  of  something  which  was  to  carry  Erie  to 
par.  It  reached  79,  when  suddenly  it  fell  back 
heavily  to  71,  to  the  astonishment  of  the  bull  faction. 
A  great  mass  of  stock  had  been  quietly  shuffled  off 
by  Daniel  Drew,  on  the  shoulders  of  the  pool. 

On  the  evening  when  Erie  stood  at  71,  the  whole 
strength  of  Wall  Street  seemed  to  have  poured  into 
the  halls  of  the  Fifth  Avenue  Hotel.  Daniel  Drew, 
with  his  face  pucked  into  an  expression  more  than 
usually  sombre  and  solicitous,  stood  near  the  grand 
stairway,  watching  the  wri things  of  his  victims,  the 
late  exultant  bulls.  A  prominent  broker  accosted 
him  as  follows,  "Well,  Mr.  Drew,  is  Erie  going  down ? " 

"  Other  folks  think  it  is,"  replied  Daniel  Drew,  with 
an  ill-suppressed  chuckle,  "  though  I  can't  give  you 
any  pynts  in  it." 

"  Other  folks  is  fond  of  cats,"  remarked  Mr.  Brooks, 
the  pieman  in  the  Pickwick  papers,  when  Samuel 
Weller  of  famous  memory,  observed  the  great  num- 
ber of  those  useful  domestic  animals  frisking  about 
the  pie-shop. 

The  hollow  truce  patched  up  in  the  preceding 
summer,  had  been  broken.  Daniel  Drew,  true  to 
his  bitter  instincts,  had  been  undermining  the  Com- 


PLOTS    AND   COUNTERPLOTS.  493 

modore  and  his  friends  who  composed  the  pool  be- 
before  named,  and  now  the  Commodore  fired  the  first 
gun  which  was  to  usher  in  the  battle.  This  gun 
roared  out  on  the  17th  of  February,  in  the  form  of 
an  injunction  obtained  from  the  Supreme  Court,  for- 
bidding Drew  and  his  brother  directors  from  the  pay- 
ment of  the  interest  and  principal  of  the  $3,500,000 
borrowed  of  Drew  in  1866.  This  was  followed  up 
by  another  action  petitioning  for  the  removal  from 
office  of  Mr.  Treasurer  Drew.  On  the  3d  of  March, 
another  injunction  was  issued  forbidding  the  Erie 
Board  to  issue  any  more  new  stock,  by  the  conver- 
sion of  bonds  or  otherwise,  in  addition  to  the  two 
hundred  and  fifty-one  thousand  and  fifty-eight  shares 
appearing  in  the  last  report  of  the  company. 

Prior  to  this,  and  on  the  19th  of  February,  by  a  vote 
of  the  Erie  Board,  the  stock  of  the  road  was  increased 
to  four  hundred  and  fifty  thousand  shares  ($45,000,- 
000  at  par.)  Five  millions  of  convertible  bonds  were 
forthwith  sold  to  Daniel  Drew,  who  promptly  con- 
Verted  them  into  stock,  and  on  or  about  the  29th  of 
February,  those  shares  were  disposed  of  in  the  mar- 
ket, carrying  down  the  price  of  Erie  to  65,  to  the  de- 
light of  Drew,  and  the  entire  bear  brigade,  which 
fought  under  his  banner.  But  just  as  these  triumph- 
ant mercenaries  were  counting  the  hours  when  Erie 
should  plunge  down  among  the  fifties,  it  wheeled  and 
rose  like  lightning  to  seventy- three,  under  the  enor- 
mous purchases  of  the  Commodore,  fortified  as  he  now 
was,  by  the  injunction  forbidding  the  issue  of  any 
more  stock.  The  smaller  bear  tribe  were  scooped  up 
as  in  a  net  by  the  dozen,  but  the  leaders  in  the  down- 
ward movement  preserved  their  serenity  in  the  face 


494  INSIDE    LIFE  IN   WALL   STREET. 

of  tills  sudden  blow.  Drew  chuckled  a  little  more 
often.  Fisk,  in  his  cataract  of  shirt-front,  and  envel- 
oped in  an  atmosphere  of  patchouli,  attended  his 
Nourmahal  to  the  opera  as  usual,  and  Gould  glided 
with  a  sinuous  grace,  through  the  conclave  of  direct- 
ors, who  met  just  at  this  time,  with  remarkable  fre- 
quency, at  the  office  of  the  Erie  Eailroad  Company. 

The  secret  of  this  serenity  was  soon  disclosed.  The 
Erie  conspirators  prepared  five  thousand  convertible 
bonds,  and  promptly  converted  them  into  fifty  thou- 
sand shares  of  stock.  Then  they  addressed  them- 
selves to  strike  the  blow.  They  had  been  ordered  to 
stand  still,  by  the  last  Vanderbilt  injunction  granted 
by  one  judge,  and  now  they  applied  for  and  obtained, 
an  injunction  in  the  name  of  a  third  party,  from  an- 
other judge,  forbidding  them  to  stand  still. 

The  plot  was  ripe.  It  only  remained  to  select  the 
broker  who  should  strike  the  blow.  The  broker 
selected  was  William  Heath,  the  head  of  the  promi- 
nent and  flivorably  known  firm  of  William  Heath  & 
Co.  He  was  a  Boston  boy,  and  his  career  as  a  buyer 
and  seller  of  stocks  on  commission,  dates  back  only  to 
the  year  1864,  when  his  fortune  was  swallowed  up 
by  the  Morse  failure,  and  he  was  thrown  back  on  his 
oars  to  start  life  again  as  a  broker.  But  in  that 
brief  period,  by  main  strength  exerted  in  the  exer- 
cise of  an  unwearied  industry,  and  by  the  display  of 
fine  business  qualities,  he  built  up  an  enormous  busi- 
ness, and  won  for  himself  a  worthy  name  and  high 
credit  on  'Change.  He  is  said  to  have  earned  in  five 
years  the  gross  sum  of  nearly  one  million  dollars  in 
commissions;  and  when  it  is  remembered  that  a  large 
portion  of  this  sum  was  from  buying  and  selling  on  a 


SPRINGING  A  LARGE   TRAP.  495 

commission  of  one  thirty-second,  i.  e,,  three  dollars 
and  twelve  cents  on  each  hundred  shares  bought  or 
sold,  the  extent  of  his  business  can  be  better  ap- 
preciated. 

A  tall,  lithe  man,  with  a  trustworthy  face,  depressed 
by  no  vices,  controlled  by  one  idea — the  buying  and 
selling  of  stocks — no  one  who  has  visited  Wall  Street 
will  have  failed  to  notice  him  as  .he  goes  swinging 
on,  plying  his  trade  like  some  automatic  and  power- 
ful machine.  It  should  be  here  remarked  that  he 
has  never  had  an  interest  in  any  of  those  combina- 
tions which  have  so  often  employed  him  to  buy  or 
sell  their  stocks,  but  has  acted  for  them  merely  in  the 
capacity  of  a  broker. 

On  the  29th  of  February,  Uncle  Daniel  might  have 
been  seen  scuttling  into  the  office  of  William  Heath 
£  Co.,  No.  19  Broad  Street.  A  few  moments  later, 
that  office  was  resonant  with  the  rustling  of  fifty 
thousand  shares  of  fresh,  crisp,  Erie  certificates,  like 
the  chirping  of  locusts  at  noontide  in  July.  On  the 
10th  of  March  again,  in  the  same  office,  was  heard 
the  rustling  of  fifty  thousand  fresh  shares,  as  they 
dropped  from  the  plump  jeweled  fingers  of  James 
Fisk,  Jr.  -.*.; 

The  open  board  met  as  usual  at  ten  o'clock  in  the 
morning.  Erie  stood  firm  as  a  pillar  of  granite  at 
79.  The  Vanderbilt  cohort  sat  with  grim  smiles 
upon  their  faces ;  their  glances  and  voices  were  level 
with  assured  triumph.  The  nods,  becks,  winks,  and 
odd  smiles  exchanged  between  them,  seemed  to  tell 
their  adversaries  that,  struggle  as  they  might,  it  was 
all  in  vain  ;  that  they  would  have  to  settle  up,  or  pay 
the  piper  a  swinging  rate. 


496  INSIDE    LIFE  IX   WALL    STREET. 

Most  of  the  bear  brigade  who  dared  still  to  keep 
short  of  Erie,  unconscious  of  the  measures  taken  for 
their  speedy  release,  were  a  pallid  group  endeavor- 
ing to  hide  their  agony  by  looking  straight  before 
them,  or  conversing  in  short  jerky  whispers  with 
those  who  sat  next  to  them,  or  lolling  back  in  their 
chairs,  feigning  indifference,  with  their  eyes  fixed 
upon  the  adipose  cherubs  frescoed  upon  the  ceiling. 

The  whole  market  hung  on  one  word — Erie.  The 
strident  voice  of  George  Henriques,  the  Vice  President 
of  the  Open  Board,  was  heard  calling  off  in  quick 
succession,  Government  Bonds,  State  Bonds,  Pacific 
Mail,  New  York  Central,  then  a  pause,  a  shadow  rip- 
pled across  his  face  and  a  shiver  ran  through  the  hall 
as  he  ejaculated  in  a  tone  still  more  strident — Erie ! 
For  ten  minutes  bedlam  seemed  to  have  broken  loose. 
Every  operator  and  broker  was  on  his  feet  in  an  in- 
stant, screaming  and  gesticulating.  The  different 
Vanderbilt  brokers  stood  each  in  the  center  of  a 
circle,  wheeling  as  on  a  pivot  from  right  to  left, 
brandishing  their  arms  and  snatching  at  all  the  stock 
offered  them.  As  the  presiding  officer's  hammer  fell 
and  his  hoarse  voice  thundered  out,  "That  will  do, 
gentlemen,  I  shall  fine  any  other  offer,"  Erie  stood  at 
80.  The  crowd  leaving  the  other  stocks  not  yet 
called,  poured  into  the  street,  where  nothing  was 
heard  but  Erie.  Yanderbilt's  brokers  had  orders 
to  buy  every  share  offered,  and  under  their  enor- 
mous purchases  the  price  rose,  by  twelve  o'clock, 
to  83. 

Meanwhile,  William  Heath  had  not  been  idle.  The 
fifty  thousand  shares  of  stock  which  had  been  given 
him  to  sell,  had  been  distributed  in  lots  of  five 'and  ten 


TAKING  THE  BULL  BY  THE  HORNS.      497 

thousand  shares  to  his  sub-agents,  and  by  half-past 
one,  they  had  all  been  disposed  of. 

In  the  very  height  of  this  battle  between  giant 
avarice,  fighting  like  a  demon  with  his  fellow  over 
the  grave  of  all  the  passions,  a  whisper  was  heard 
which  sent  an  electric  thrill  through  the  whole  mar- 
ket. This  whisper,  breathed  thus,  was  "thousands 
of  shares  of  fresh  certificates,  dated  three  days  back, 
and  in  the  name  of  James  Fisk,  Jr.,  are  on  the  street." 
The  price  dropped  like  lead  to  71. 

Vanderbilt  had  lost  the  day.  The  news  of  this  dis- 
aster was  carried  to  him  by  a  friend,  who  asked  if  he 
would  now  sell  his  Erie?  He  roared  a  thundering 
Xo  !  His  situation  was  indeed  critical,  loaded  as  he 
was  with  ten  millions  of  fresh  Erie  stock,  which  marked 
down  the  intrinsic  value  of  the  stock  to  50,  to  say 
nothing  of  the  huge  blocks  of  Central,  Hudson,  and 
Harlem,  which  he  was  carrying  on  his  aged  shoulders. 
Any  lack  of  nerve  would  have  produced  a  financial 
collapse,  which  would  have  involved  himself  and 
thousands  of  others  in  frightful  loss,  and  perhaps  ruin. 
But  he  never  flinched. 

His  first  move  was  to  punish  his  adversaries,  by 
bringing  them  under  the  process  of  the  court,  whose 
injunction  they  had  disregarded. 

The  executive  committee  of  the  Erie  Board  were 
holding  high  festival  over  their  triumph,  at  the  offices 
of  the  company,  at  the  foot  of  Duane  Street,  on  the 
morning  of  the  llth  of  March.  Uncle  Daniel's  cor- 
rugated visage  was  set  into  a  chronic  chuckle.  Jay 
Gould's  financial  eye  beamed  and  glittered,  and  the 
blonde  bulk  of  James  Fisk,  Jr.  was  unctuous  with 
jokes,  when  a  messenger  arrived,  conveying  to  them 


498  INSIDE    LIFE  IN   WALL    STKEET. 

the  intelligence  that  process  of  the  court  had  been 
issued,  to  punish  them  for  contempt  of  its  mandates, 
and  would  soon  be  placed  for  service  in  the  hands  of 
the  high  sheriff's  spongy  officers. 

Then  there  were  hurryings  to  and  fro  in  the  Erie 
Eailroad  Office.  A  few  moments  later,  and  the  po- 
liceman on  that  beat  observed  a  squad  of  respectably 
dressed,  but  terrified  looking  men,  loaded  down  with 
packages  of  greenbacks,  account  books,  bundles  of 
papers  tied  up  with  red  tape,  emerge  in  haste  and 
disorder  from  the  Erie  building.  Thinking  perhaps 
that  something  illicit  had  been  taking  place,  and 
these  individuals  might  be  plunderers  playing  a  boW 
game  in  open  daylight,  he  approached  them,  but  he 
soon  found  out  his  mistake,  they  were  only  the  ex- 
ecutive committee  of  the  Erie  Company,  flying  the 
wrath  of  the  Commodore,  and  laden  with  the  spoils 
of  their  recent  campaign. 

By  three  o'clock  that  afternoon  the  fugitives  had 
established  their  headquarters  at  Taylor's  Hotel,  in 
Jersey  City,  and  were  sheltered  from  the  process  of 
the  New  York  Courts  under  the  broad  segis  of  the 
free  and  sovereign  State  of  New  Jersey.  They  were 
provided  with  ammunition  in  the  shape  of  from  six 
to  ten  millions  of  money,  principally  the  proceeds 
from  the  sale  of  one  hundred  thousand  shares  of  new 
Erie  stock,  which  they  had  saddled  upon  Vanderbilt, 
and  now  were  ready  to  open  fire  all  around,  though 
at  long  range. 

The  old  proverb,  that  laws  are  cobwebs  which  catch 
only  small  flies,  while  the  large  flies  break  through 
and  escape,  was  now  fully  illustrated. 

The  litigation  which  followed,  was  a  carnival  for 


COURTS  AND  LEGISLATURES  APPEALED  TO.  499 

the  legal  fraternity.  The  fees  of  one  of  the  lawyers 
amounted  to  $150,000.  This  was  only  one  item  in 
a  bill  of  costs  payable  to  an  army  of  attorneys  and 
counselors.  The  files  of  the  courts  were  stacked  with 
affidavits  and  counter  affidavits,  complaints,  answers, 
replies,  demurrers  and  orders.  The  Supreme  Court 
rang  with  the  criminations  and  recriminations  of  the 
rival  factions,  while  reluctant  witnesses  were  stretched 
upon  the  rack  and  badgered  and  threatened  in  order 
to  elicit  from  them  the  dark  secrets  of  the  stock-trade. 
The  gravest  insinuations  were  made  against  the  pu- 
rity of  the  judicial  ermine. 

Outside  the  courts  of  law,  the  battle  was  renewed 
in  other  fields.  The  press,  siding  with  one  party  or 
the  other,  teemed  with  articles  and  affidavits  affect- 
ing the  combatants  by  forestalling  public  opinion. 
In  the  Legislature  of  New  Jersey,  an  act  was  passed 
making  the  Erie  Railway  Company  a  corporation  of 
that  State.  In  the  Legislature  of  New  York,  a  bill 
was  introduced  for  the  purpose  of  legalizing  the  new 
issue  of  Erie  stock,  providing  for  a  broad  gauge  con- 
nection between  New  York  and  Chicago,  and  forbid- 
ding the  consolidation  of  Erie  with  Central.  The 
securing  of  the  passage  of  this  bill  was  entrusted  to 
Jay  Gould,  a  master  of  diplomacy,  who,  braving  the 
process  for  contempt  which  was  out  against  him,  suc- 
ceeded in  establishing  himself  in  Albany,  fortified 
with  a  trunk  full  of  greenbacks,  and  proceeded  to 
lobby  for  its  passage.  The  Erie  Company  leveled 
another  blow  at  Vanderbilt,  by  lowering  the  tariff  of 
freights  and  passengers  on  their  road,  to  a  ruinous 
rate. 

Meanwhile  the  withdrawal  of  the  vast  sum  carried 


500  INSIDE    LIFE  IN  WALL   STREET. 

away  by  the  conspirators  into  ^ew  Jersey,  had  cre- 
ated a  stringency  in  the  money  market,  and  stocks 
declined  in  a  semi-panic.  New  York  Central  fell 
from  132  to  108f.  The  market  was  full  of  rumors 
affecting  the  solvency  of  Vanderbilt.  He  had  de- 
clared his  intention  to  hold  up  Erie,  if  he  had  to 
mortgage  every  dollar  of  property  he  possessed.  But 
could  he  do  it?  He  was  exposed  to  fresh  issues  of 
Erie  stock,  which  it  was  reported  his  opponents  had 
threatened  to  make.  Some  of  his  associates,  terri- 
fied at  the  prospect,  threw  their  New  York  Central 
stock  upon  the  market.  Heavy  bets  were  made,  that 
the  bill  legalizing  the  new  issue  of  Erie  stock  would 
pass  the  Legislature,  and  that  New  York  Central 
would  go  down  to  par. 

The  whole  street  seemed  to  be  selling  Central. 
When  it  reached  108f,  it  wheeled  and  shot  back  to 
111,  amid  the  consternation  of  the  bears,  who  still 
persisted  in  selling. 

Monday,  April  20th,  was  a  dark,  cloudy  day.  The 
effect  of  the  weather  upon  stocks  is  very  apparent. 
That  strange,  and  many-chorded  instrument,  the 
human  nerve,  is  nowhere  more  delicately  strung,  or 
more  responsive  to  the  subtlest  influences,  than  in 
the  orchestra  of  stock-speculation.  Eye,  ear,  touch, 
and  all  the  ganglia,  are  morbidly  alive.  Sometimes 
a  harmless  piece  of  tissue-paper,  thrown  by  one  op- 
erator to  another,  or  a  half-uttered  confidence,  would 
seem  to  be  enough  to  start  a  panic,  or  send  the  mar- 
ket "kiting"  up  among  the  tall  figures.  The  outside 
atmosphere  is  one  of  these  influences.  Hence  it  is 
that  the  barometer  of  finance  seems  to  respond  to  the 
atmospherical  barometer,  the  nerve  fluid  seeming  to 


A   BACKBONE   WITHOUT   MARROW.  501 

be  as  susceptible  as  the  mercury  in  the  bulb.  When 
cliques  have  control  of  a  stock,  they  rarely  select  a 
wet,  unpleasant  day  in  which  to  run  up  the  price. 

But  this  rule  did  not  hold  good  in  the  case  of  New 
York  Central.  On  the  Monday  before  mentioned, 
at  twelve  o'clock,  meridian,  the  news  reached  the 
Long  Room,  that  the  Erie  bill  had  passed  by  a  large 
majority.  The  bears  (who  generally  sympathized 
with  the  Erie  faction),  now  sold  Central  short  on 
every  side.  The  skies  grew  black,  and  a  pouring 
shower  followed,  amid  which  the  strong  hand  of  the 
Commodore,  regardless  of  the  elements  which  were 
against  him,  hoisted  the  enormous  bulk  of  Central 
to  120. 

How  did  it  happen,  that  he  had  thus  resumed  his 
grip  on  Central?  Had  a  settlement  been  made  by 
the  litigants? 

Yanderbilt  understood  the  character  of  Drew.  He 
knew,  and  said  that  he  had  "no  backbone,"  and 
would  be  inclined  to  compromise.  The  event  proved 
that  he  knew  his  man.  Hardly  had  the  Erie  con^ 
federates  been  installed  in  Taylor's  Hotel,  when  his 
younger,  and  more  robust  associates,  noticed  the 
workings  of  his  timid,  vacillating  nature.  He  had 
been  borne  along  by  their  stronger  wills,  and  now 
felt  painfully  his  trying  position.  He  missed  his 
pleasant  fireside,  where  had  so  often  toasted  his  aged 
limbs,  and  dreamed  of  panics. 

One  evening  he  was  missed  from  the  conclave; 
where  could  he  be?  His  associates  distrusted  him, 
and  put  detectives  on  his  track.  He  was  followed  to 
Weehawken  ferry,  and  it  was  ascertained,  that  he 
was  making  secret  visits  to  New  York.  From  that 


502  DfSIDE    LIFE   IN   WALL    STREET. 

time,  he  was  never  free  from  the  surveillance  of  de- 
tectives. He  drew  out  the  money,  which  had  been 
brought  over  at  the  time  of  his  flight,  and  carried  it 
to  New  York.  James  Fisk,  Jr.,  attached  his  securities 
in  Jersey  City,  and  compelled  him  to  restore  it. 

Under  the  process  of  the  court,  Daniel  Drew  was 
liable  to  be  immured  in  Ludlow  Street  jail.  But  Sun- 
day brings,  besides  its  other  blessings,  immunity  from 
arrest.  One  Sunday  in  April  saw  the  "old  man"  at 
the  house  of  the  Commodore.  Once  more  he  shed 
salt  tears  and  supplicated  for  mercy.  "The  gentle 
dew  of  mercy"  was  dropped  upon  him,  and  a  few 
days  after  that  he  was  seen  in  Broad  Street,  on  a 
week  day.  Rumors  began  to  spread,  but  nothing 
definite  was  known  for  some  weeks.  The  rise  in  Cen- 
tral, however,  told  the  story  to  those  who  chose  to 
put  two  and  two  together. 

The  terms  of  this  settlement  have  lately  been 
made  public  in  the  most  thorough  manner,  in  the 
great  suit  of  the  Erie  Railway  Company  vs.  Cornelius 
Yanderbilt. 

He  was  relieved  of  fifty  thousand  shares  of  Erie 
stock,  and  received  therefor,  $2,500,000  in  cash,  and 
$1,250,000  in  bonds  of  the  Boston,  Hartford  and  Erie 
Company,  at  80.  He  also  received  the  further  sum  of 
$1,000,000  for  the  privilege  given  the  Erie  Company 
thus  purchased,  of  calling  upon  him  for  his  remain- 
ing fifty  thousand  shares  at  70,  any  time  within  four 
months.  This  settlement  was  effected  late  in  April. 
The  day  after  it  took  place,  Fisk,  Jr.  could  have 
been  seen  on  the  street  in  a  nobby  velvet  coat,  whis- 
pering into  the  ears  of  his  old  comrades,  "Erie  is  go- 
ing down." 


PREPARING   FOR    A  NEW    CAMPAIGN.  503 

The  next  thing  to  be  done  was  to  sell  the  one 
hundred  thousand  shares  of  Erie.  How  could  it  be 
effected?  for, one  hundred  thousand  shares  is  no  flea 
bite.  Very  easily,  thus :  Orders  were  given  every  day 
to  sell  a  certain  amount  of  the  stock  and  to  hold  the 
market  steady  meantime.  The  stock  thus  sold,  was 
borrowed  of  different  parties  for  delivery,  and  in  this 
way  the  impression  was  created  among  those  not  in 
the  secret,  that  a  large  short  interest  was  being  made ; 
this  induced  the  belief  that  Drew  and  Vanderbilt  were 
working  together  to  raise  the  price  so  as  to  sell  their 
stock.  In  a  few  weeks,  one  hundred  thousand  shares 
were  sold.  Then  the  parties  from  whom  the  stock 
had  been  borrowed,  were  repaid  with  the  hundrexi 
thousand  shares  held  jointly  by  the  Erie  Company 
and  by  Vanderbilt. 

Three  months  of  comparative  dullness  in  Erie 
passed  away,  and  then  Uncle  Daniel  took  down  his 
rusty  and  cobwebbed  armor,  donned  his  bear-skin 
cap,  and  prepared  to  enter  a  new  campaign  against 
all  the  bulls.  Erie  was  to  be  depressed.  The  first 
step  towards  this  depression  had  been  already  taken. 
The  Erie  Company  was  now  under  the  control  of 
Jay  Gould,  who  had  been  chosen  president,  and  James 
Fisk,  Jr.,  who  had  been  chosen  comptroller  of  the 
company.  The  leaders  of  the  Tammany  ring,  Peter 
B.  Sweeney,  and  William  M.  Tweed,  were  added  to 
the  Board  of  Directors.  During  the  four  months 
prior  to  the  24th  of  October,  1868,  fresh  issues  of 
Erie  stock,  had  been  forced  upon  the  market.  The 
capital  stock  had  been  increased  by  two  hundred 
and  thirty-five  thousand  shares,  and  now  stood  at 
$57,766,300.  The  stock-price  ran  down  to  44. 


504  INSIDE    LIFE  IN   WALL    STREET. 

The  next  step  was  to  lock  up  greenbacks,  and  thus 
produce  an  artificial  stringency  in  the  money  market. 

It  has  been  stated  in  these  pages,  that  money  in 
the  fall  season,  flows  westward  and  southward,  away 
from  New  York.  The  money  system  is  like  the  cir- 
culatory system  in  the  human  body.  The  sub-treasury 
in  New  York,  is  the  financial  heart  of  the  nation. 
The  money  which  flows  in  and  out  of  that  great  de- 
pository, is  the  blood  of  commerce  running  through 
great  arteries. 

It  was  now  proposed,  that  this  circulatory  system 
should  be  constricted,  so  that  money  could  flow  with 
less  freedom,  and  stocks  be  depressed. 
•  Three  doctors,  Daniel  Drew,  Jay  Gould  and  James 
Fisk,  Jr.,  now  put  their  fingers  on  the  financial  pulse 
and  then  constricted  the  money  arteries  by  locking 
up  greenbacks.  This  is  a  device  of  comparatively 
recent  invention.  It  is  accomplished  in  this  way. 
Checks  for  a  large  amount  are  drawn  on  various 
banks  by  some  of  the  heavy  depositors.  Then  these 
checks  are  certified  as  good  by  the  banks,  and  green- 
backs are  borrowed  upon  them  as  collateral  and 
locked  up.  A  scarcity  of  money  ensues  and  stocks 
fall. 

The  Erie  conspirators  had  in  their  possession  many 
millions,  the  proceeds  from  the  sales  of  the  new  stock. 
Drew  added  four  millions  to  the  combination.  There- 
upon, $14,000,000  was  withdrawn  from  the  circulation. 
The  money  rate  tightened  fearfully,  and  the  large 
holders  of  stocks  saw  ruin  impending.  Among  the 
number  was  Henry  Keep.  He  was  loaded  down  enor- 
mously with  North-west  stock,  and  would  break  un- 
less he  could  secure  $2,000,000.  In  his  extremity  he 


CORNERED   AND   BADLY   PUNISHED.  507 

applied  to  his  old  associate  Drew,  who  saved  him  by 
loaning  him  the  required  sum. 

Drew  now  retired  from  the  "locking  up"  combina- 
tion. This  excited  their  ire.  The  old  man  was  short 
of  70  thousand  shares  of  Erie,  and  his  associates  re- 
solved to  punish  his  treachery.  They  bought  an  im- 
mense amount  of  Erie  at  low  prices,  and  then  "un- 
locking greenbacks,"  money  became  easy  again.  Erie 
was  hoisted  to  61.  Drew  was  cornered,  and  tried  to 
compromise  his  contracts,  but  his  old  associates  refused 
to  "let  him  up."  He  had  to  buy  in  his  shorts  with  the 
loss  of  a  million  and  a  half  of  dollars. 


CHAPTER    XXXIH. 
THE  GREAT  GOLD  CONSPIRACY  OF  1869. 

How  Gold  was  Put  Up  and  Down  since  1865 — Gold  Looks  Downwards 
in  1869,  and  Why—Jay  Gould  Organizes  a  Scheme — Amount  of  Gold 
to  be  Handled— The  Complicity  of  Government  Sought  to  be  Ob- 
tained— Influences  Brought  to  Bear — The  Leaders  of  the  Conspiracy 
—Everybody  Selling  Gold  Short— The  Vast  Sums  Bought  by  the 
Clique— Jay  Gould  on  the  Rack — Fisk  Comes  to  the  Front — A  New- 
Programme — The  Conspiracy  Draws  to  a  Head — Dawning  of  Black 
Friday — Strategy  Adopted — Actresses  Gazing  on  the  Drama — The 
Battle  in  the  Gold- Room — Rout  of  the  Conspirators — Speyers  Bid- 
ding Up  Gold — The  Bears  Triumph — Scenes  in  Broad  Street — The 
Stock  Panic. 

•N  the  corner  of  Twenty- third  Street  and 
Eighth  Avenue  stands  a  white  marble  palace, 
adorned  on  the  exterior  with  statues  and 
elaborate  cornices,  and  hollowed  in  the  interior  into  a 
sumptous  opera  hall,  surrounded  by  spacious  and 
richly  furnished  rooms — at  once  a  fortress  and  a 
temple.  Here  have  been  planned  the  fiercest  cam- 
paigns in  the  stock  market,  and  here,  too,  have  been  ex- 
hibited the  most  gorgeous  scenes  of  the  spectacular 
drama.  Pike's  Opera  House,  since  1868,  has  been 
known  as  Erie  Castle. 

This  now  famous  block  of  buildings  passed,  two 
years  since,  into  the  hands  of  the  stock  and  theatrical 
impressario,  James  Fisk,  Jr.,  by  whom  it  was  leased 
to  f/he  Erie  Railway  Company  as  their  principal  office. 


GETTING   READY   TO   LIFT.  509 

Here,  sitting  at  their  ease,  surrounded  by  luxury, 
in  a  magnificent  apartment,  with  shrewd  lawyers  at 
their  elbow,  two  confederates  plotted  the  great  gold 
conspiracy  of  1869,  and  coolly  organized  the  ruin  of 
thousands. 

From  April,  1865,  to  September,  1869,  a  period 
of  more  than  four  years,  the  movements  of  gold 
had  been  brought  about  by  artificial  means,  in  con- 
junction with  commercial  causes,  or  rather  pretexts. 
The  price  of  Government  Bonds  abroad,  wars  or 
rumors  of  wars  in  Europe,  disturbances  of  trade, 
the  shipments  of  the  precious  metal  in  payment 
of  our  imports,  sales  of  gold  by  our  government; 
these  and  a  thousand  other  strings  were  harped 
upon  by  the  gold  gamblers  to  produce  those  singular 
upward  and  downward  oscillations  in  the  price, 
which  enriched  the  members  of  the  Gold  Board, 
while  they  disturbed  the  peace  of  commerce  and 
beggared  a  host  of  infatuated  outside  dealers. 

Wall  Street,  like  history,  repeats  itself.  Every 
summer,  since  1865,  there  had  been  a  rise  in  gold. 
In  March,  1869,  gold  fell  to  131.  The  astute  intel- 
lect of  Jay  Gould  now  foresaw  another  opportunity 
to  push  up  the  price  of  gold,  and  having  purchased 
$7,000,000  of  it,  by  playing  on  the  strings  of  the 
Cuban  insurrection,  the  Alabama  difficulties,  the 
prospect  of  a  war  between  France  and  Prussia,  etc., 
terrified  the  bears  and  rushed  up  the  price  to  145. 
Emboldened  by  the  success  of  this  move,  he  formed 
a  new  and  daring  scheme. 

We  call  it  a  daring  scheme,  for  outside  influences 
to  help  it  there  were  none. 

At  home,  the  Republic  was  at  peace ;  barns  burst- 
Si 


510  INSIDE    LIFE  IN  WALL   STREET. 

ing  with  a  garnered  harvest,  cattle  on  a  thousand 
hills,  cotton  whitening  innumerable  fields.  The  gov- 
ernment rapidly  diminishing  the  debt,  gave  assurance 
of  the  speedy  resumption  of  specie  payments.  The 
balance  of  trade  necessitating  the  shipment  of  coin 
to  foreign  countries,  was  but  slightly  against  the 
United  States. 

Abroad,  the  cloud,  of  war  between  France  and 
Prussia  had  faded  to  a  mere  speck.  England  was 
looking  with  equanimity  upon  the  Alabama  claims. 
The  policy  of  our  government  toward  Cuba  was  that 
of  non-intervention. 

It  was  to  be  a  dead  lift.  Nothing  but  the  shorts 
would  help  it.  It  could  only  be  successful  by  a  ju- 
dicious application  of  the  great  law  of  supply  and 
demand.  The  demand  must  be  created,  and  then  the 
supply  must  be  shut  down  upon. 

Jay  Gould,  the  arch  conspirator,  calmly  surveying 
the  situation,  and  undeterred  by  the  difficulties  it  pre- 
sented, proceeded  to  organize  in  the  most  secret  for- 
ges of  Wall  Street,  a  band  of  Vulcans,  who  should 
weld  and  rivet  the  chains  by  which  all  the  bears  on 
'Change  should  be  bound  and  made  to  dance  as  if  on 
red-hot  plates ;  first  to  slow,  and  then  to  quick  music. 

To  accomplish  the  ends  proposed,  both  the  actual 
and  the  possible  supply  of  gold  in  the  city  of  New 
York  must  be  provided  for. 

Gold  coin  in  the  city  of  New  York  is  found  under 
three  conditions.  In  the  first  place,  there  is  the  float- 
ing gold,  which  is  used  by  the  speculators  to  make 
their  deliveries,  and  for  other  commercial  purposes. 
In  August,  1869,  the  amount  of  this  floating  gold 
was  estimated  at  from  $15,000,000  to  $20,000,000. 


ORGANIZING   THE   FORCES.  511 

This  was  but  a  bagatelle  for  a  ring  to  buy  up.  In  the 
second  place,  there  is  the  gold  held  by  the  banks,  a 
part  of  which  is  loaned  to  the  importing  merchants, 
for  the  payment  of  duties  to  the  Government.  But 
little  of  this  gold,  held  by  the  banks,  comes  upon  the 
street.  In  the  third  place,  there  was  the  gold  in  the 
sub-treasury  of  the  United  States,  amounting  to  a 
daily  average  of  $80,000,000.  The  Government,  in 
the  summer  of  1869,  was  selling  one  million  of  this 
amount  every  alternate  week. 

The  pivot  upon  which  the  whole  scheme  would 
turn,  was  the  policy  of  the  Government  in  their  sales 
of  gold.  The  coin  in  the  sub-treasury  hung  like  an 
avalanche  over  any  combination  which  should  under- 
take to  raise  the  price.  The  complicity  of  high 
officials  would  have  to  be  secured,  in  order  to  keep 
down  the  sales  to  a  limited  amount. 

As  far  back  as  June,  an  unsuccessful  effort  was 
made  to  secure  the  appointment  of  a  sub-treasurer 
in  fhe  interest  of  the  ring. 

The  President  of  the  United  States  was  then  ap- 
proached directly,  for  the  purpose  of  ascertaining 
what  the  future  financial  policy  of  the  Government 
might  be  with  respect  to  sales  of  gold,  but  without 
eliciting  any  information  from  our  reticent  chief 
magistrate. 

A  plausible  theory  respecting  the  necessity  to 
commercial  interests  of  high-priced  gold,  was  sug- 
gested by  James  McHenry,  a  prominent  English 
financier,  and  was  ventilated  freely  by  Jay  Gould  for 
the  purpose  of  forestalling  official  action. 

The  medium  selected  by  the  conspirators  for 
securing  the  complicity  of  the  high  officers  of  the 


512  INSIDE    LIFE   IS  WALL    STREET. 

Government,  was  the  now  notorious  Abel  R.  Corbin, 
who,  by  virtue  of  a  marriage  connection,  claimed  to 
be  able  to  influence  the  chief  executive  of  the  nation 
in  the  matter  of  gold  sales.  Upon  the  promises  and 
representations  of  this  man,  hung  the  whole  success 
of  the  plot.  The  planners  relied  sufficiently  upon 
him  to  proceed  to  organize  their  forces  and  enter 
upon  the  prosecution  of  their  scheme. 

The  nucleus  of  the  combination  consisted  of  Jay 
Gould,  James  Fisk,  Jr.,  W.  S.  Woodward,  the  veteran 
speculator,  and  Arthur  Kimber,  the  youthful  agent 
of  a  wealthy  London  banking  house.  Around  this 
nucleus  revolved  a  number  of  rich  bankers,  sly  poli- 
ticians, officials,  and  corporations  made  compact  by 
the  potentiality  of  a  wealth  beyond  the  dreams  of 
avarice,  and  cohesive  with  the  hope  of  plunder. 

When  gold  fell,  in  August,  to  131,  it  looked  as  if 
the  finger  of  a  child  could  have  rolled  it  down  to  120. 
Nearly  everbody  thought,  and  said,  that  the  price 
was  doomed  to  fall  lower  than  at  any  time  since  18G2. 
All  the  world,  in  a  commercial  sense,  stood  ready  to 
profit  by  the  fall.  The  importing  merchants  borrowed 
it,  and  sold  it,  by  the  million.  The  foreign  bankers 
sold  it  by  the  car  load.  The  brokers  sold  it  all  around 
the  board ;  the  bond-holders,  the  administration  poli- 
ticians, and  the  outside  public,  all  sold  it  for  future 
delivery.  They  "stood  on  their  shorts,"  or  rather, 
sat  incubating  on  them,  as  if  they  were  golden  eggs. 
The  clique  bought  this  gold. 

About  the  middle  of  September,  Woodward  bought 
nine  millions,  at  133*  to  134,  for  the  account  of  him- 
self, Kimber  and  Gould.  Prior  to  this,  large  amounts 
of  gold  had  been  bought. 


FISK   COMES    TO    THE    FRONT.  513 

The  price  rose  heavily  to  138,  at  which  price  Wood- 
ward and  Kimber  are  said  to  have  sold  their  interest, 
and  retired  from  the  combination.  Their  associates 
enlisted  new  coadjutors  and  still  persisted  in  their 
scheme. 

On  the  morning  of  Wednesday,  the  22d  of  Sep- 
tember, the  conspirators  held  several  millions  more 
gold  than  wras  in  the  city  of  New  York,  outside  of 
the  sub-treasury,  and  yet  the  price  had  risen,  in  the 
face  of  these  purchases,  only  to  141. 

The  price  would  soon  have  to  be  bid  up  to  150,  at 
least,  but  the  buying  of  high-priced  gold  in  the  form 
of  contracts  from  those  who  were  selling  it  for  future 
delivery,  is  quite  a  different  thing  from  buying  the 
actual  coin,  which  the  Government  might  sell  and 
deliver. 

It  was  natural,  in  contemplation  of  the  difficulty 
with  which  the  price  wras  raised,  that  Jay  Gould  should 
feel  anxiety  as  to  the  ultimate  success  of  the  move- 
ment. He  knew  thoroughly  well  how  much  depended 
on  the  influence  of  Corbin,  in  retarding  official  sales, 
and  already  he  more  than  distrusted  him,  with  how 
much  reason  the  event  has  shown.  He  well  knew 
that  if  his  suspicions  were  correct,  and  official  sales 
of  Government  gold  should  not  be  withheld  through 
Corbin's  influence,  the  only  thing  to  be  relied  upon, 
was  a  bold  game,  to  terrify  the  shorts  and  compel 
them  to  cover  their  contracts  at  a  high  figure.  The 
personal  magnetism  and  brute  pluck  of  James  Fisk, 
Jr.,  were  now  brought  to  the  front.  Let  this  indi- 
vidual tell  the  story  in  his  own  characteristic  manner. 

"  When  Gould  found  himself  loaded  down  to  the 
gunnels  and  likely  to  go  under,  the  cussed  fellow 


514  INSIDE    LIFE   IN   WALL    STREET. 

never  said  a  word — he's  too  proud  for  that — but  I 
saw  him  tearing  up  bits  of  paper.  When  Gould 
snips  off  corners  of  newspapers  and  tears  'em  up  in 
bits,  I  know  that  there's  trouble.  Then  I  come  in  to 
help — he  knows  I'd  go  my  bottom  dollar  on  him, — and 
said  to  him,  '  Look  here,  old  fellow,  when  I  was  a  boy, 
on  a  farm  in  Vermont,  I've  seen  the  old  man  go  out  to 
yoke  up  Buck  and  Brindle ;  he'd  lift  the  heavy  yoke 
on  to  Brindle's  neck,  key  the  bow,  and  then,  holding 
up  the  other  end,  motion  to  old  Buck  to  come  under, 
and  old  Buck  would  back  off  and  off,  and  sometimes, 
before  he  could  persuade  him  under,  the  yoke  would 
get  too  heavy  for  dad.  And,  Gould,  old  fellow,  Wall 
Street  won't  be  persuaded,  and  the  yoke  is  getting 
damned  heavy — and  here  I  am  to  give  you  a  lift.' " 

The  time  was  rapidly  approaching  when  the  deci- 
sive blow  must  be  struck.  The  vaults  of  every  bank 
in  the  Union,  in  Montreal  and  the  Bank  of  England 
had  been  called  upon  to  disgorge,  and  the  gates  of 
the  national  treasury  had  been  stormed  with  prayers 
to  let  loose  the  coin  and  save  the  country,  or  at  least 
the  bears. 

On  the  evening  of  the  23d  of  September,  the 
clique  rushed  in  and  took  possession  of  the  private 
office  of  William  Heath  &  Co.,  after  the  firm  had  left 
for  the  day.  A  sumptuous  banquet  and  wine  were 
ordered  in  from  a  neighboring  restaurant.  Nothing 
definite  seems  to  have  been  resolved  on  at  this  meet- 
ing, except  that  the  bears  must,  within  a  day  or  two, 
be  compelled  to  fulfill  their  contracts.  It  was  at  some- 
time on  the  same  day,  however,  that  a  new  programme 
was  determined  upon,  for  which  purpose  William 
Belden,  a  former  partner  of  Fisk,  was  brought  ac- 


LEADING  FORTH  THE  SCAPE-GOAT.      515 

lively  into  the  combination.  He  proceeded  to  buy 
that  day  not  less  than  $8,000,000  for  the  account  of 
the  clique,  and  thus  appeared  prominently  as  their 
agent. 

The  question  always  to  be  asked  in  buying  stocks, 
is  for  whom  they  are  to  be  bought,  who  is  responsible 
for  them.  By  the  rule  of  law,  every  agent  dealing 
for  an  unknown  principal,  is  personally  liable  for  all 
the  contracts  he  makes.  The  new  programme  de- 
cided upon,  was  the  making  of  William  Belden,  a 
man  of  little  means,  the  principal  in  immense  con- 
tracts for  purchases  of  high-priced  gold,  which  were 
to  be  made  through  Fisk,  who  was  to  act  merely  as 
an  agent,  and  would  thus  avoid  all  personal  liability. 
A  paper  was  given  by  Belden  to  Fisk,  granting  him 
unlimited  power  to  buy  gold  for  his  (Belden's)  ac- 
count. The  brokers  employed  by  Fisk  would  buy  on 
his  orders,  'supposing  that  he  was  the  principal. 
Belden  was  in  this  way  to  be  the  scape-goat  on  whose 
shoulders  an  immense  burden  of  liability  for  pur- 
chases of  high-priced  gold  would  ultimately  fall. 

On  Thursday,  the  23d,  Fisk  made  his  personal  mag- 
netism felt  by  visiting  the  gold-room,  where  he  struck 
terror  into  the  hearts  of  the  bears,  by  offering  a  bet 
of  any  part  of  $50,000,  that  gold  would  sell  at  200. 
Wherever  he  went  that  day  he  bulled  gold,  predicted 
an  enormous  rise,  and  openly  boasted  of  the  compli- 
city of  the  Government  in  the  schemes  of  the  con- 
spirators. He  proposed  to  his  associates  that  a  com- 
plete list  of  two  hundred  and  fifty  firms,  known  to 
be  short  of  gold,  should  be  published  in  the  daily 
papers  of  the  next  day,  stating  the  amount  that  each 
firm  was  short  of;  declaring  how  much  gold  the 


516  INSIDE    LIFE  IN   WALL    STKEET. 

clique  held ;  and  informing  the  victims  that  if  they 
did  not  settle  at  145,  by  three  o'clock,  a  higher  rate 
would  be  demanded.  But  this  proposition  was  re- 
jected upon  the  advice  of  counsel. 

The  extent  of  the  operations  of  the  clique  can  be 
best  understood  by  a  few  figures.  The  calls  or 
options  for  the  delivery  of  gold  by  other  parties,  and 
the  cash  gold  which  they  held,  was  stated  to  be  from 
$80,000,000  to  $110,000,000.  The  amount  of  short 
interest  is  said  to  have  been  $250,000,000,  the  larger 
portion  of  which  had  been  made  under  144. 

The  plot  was  ripe  on  the  evening  of  the  23d,  when 
the  conspirators  held  a  meeting  as  already  described. 
The  cash  gold  bought  had  been  loaned  by  the  ring  to 
the  bears,  who,  to  fulfill  their  contracts,  were  in  this  way 
carrying  it  for  the  clique  in  the  manner  described  in 
our  preceding  chapters.  This  fact  dispensed  with  the 
necessity,  on  the  part  of  the  clique,  for  any  very  large 
amount  of  money.  One  prominent  brokerage  firm 
held  $10,000,000  and  upwards,  which  had  cost  them 
an  average  of  138,  and  on  which  they  had  received 
no  margin  from  the  clique.  They  carried  it  by  loan- 
ing it,  and  fortified  by  a  rise  of  four  or  five  per  cent, 
advance  in  the  price.  Belden  is  said  to  have  received 
no  margin,  and,  having  little  money  himself,  provided 
in  the  same  way  for  the  cash  gold  which  he  bought. 

Here  it  should  be  noticed  that  the  Gold  Bank 
affords  the  greatest  facilities  for  speculation  by  the 
system  it  has  adopted  for  paying  differences,  which 
dispenses  with  the  cumbrous  machinery  of  deliveries, 
and  enables  men  with  a  few  thousand  dollars  capital 
to  do  a  daily  business  of  millions. 

The  problem  now  was  how  to  compel  the  bears  to 


THE   VAULTS    OP   THE    STOCK   EXCHANGE*        517 

cover,  for  they  were  obstinate  and  refused  to  believe 
in  the  upward  movement. 

Beneath  the  Stock  Exchange  there  are  dungeons 
for  the  confinement,  not  of  men,  but  of  money.  The 
resources  of  art  have  been  exhausted  to  make  these 
dungeons  secure.  Hundreds  of  safes,  built  of  huge 
granite  blocks,  lined  with  chilled  iron  and  tempered 
steel,  closed  with  treble  patent  locks,  are  ranged  ,in 
long  rows  in  the  dim  gas-light,  and  guarded  day  and 
night  by  trusty  watchmen  sitting  behind  grated  bars. 
Here  is  more  wealth  laid  away  than  in  any  other 
depository  on  the  hemisphere.  In  these  vaults  it  was 
proposed  that  on  the  morning  of  the  24th,  the  gold 
that  had  been  loaned  should  be  called  for,  locked  up, 
and  then  that  the  bears  should  be  forced  to  settle  by 
buying  them  in  under  the  rule  or  otherwise. 

To  this  end  the  Tenth  National  Bank,  where  the 
principal  members  of  the  clique  owned  a  controlling 
interest,  was  instructed  to  certify  the  checks  of  their 
brokers  to  any  amount  which  might  be  called  for. 
This  precaution  was  taken  to  provide  for  the  large 
sums  necessary  in  shifting  the  gold  from  the  bears,  who 
had  borrowed  it,  and  locking  it  up  in  the  vaults  of 
the  Stock  Exchange. 

But  this  plan  was  disconcerted  in  the  following 
manner.  Some  of  the  bears,  noticing^  the  extent  to 
which  checks  were  certified  for  the  account  of  the 
clique,  made  representations  at  Washington  to  the 
effect  that  the  bank  was  overstepping  its  legal  pow- 
ers. Accordingly,  on  the  morning  of  the  24th,  the 
bank  examiners  made  their  appearance  for  the  pur- 
pose of  investigating  the  books  of  the  Tenth  National 
Bank.  Although  the  bank  passed  through  the  ordeal 


518  INSIDE    LIFE  IN   WALL    STREET. 

unscathed,  there  is  no  doubt  that  the  operations  of 
the  clique  were  greatly  hampered  by  this  move. 

The  programme  now  was  to  put  up  gold  swiftly, 
and  terrify  the  bears  into  settlements.  Albert  Spey- 
ers,  a  wealthy  German,  who,  after  a  life  of  chequered 
experience,  had  settled  down  into  a  gold-broker,  was 
the  agent  selected  to  accomplish  this,  under  the  orders 
of  Fisk  and  Gould.  Speyers  is  a  true  type  of  the 
gold-dealer  class.  A  slender,  wiry  man,  with  inflam- 
mable eyes,  a  face  criss-crossed  with  wrinkles,  and  an 
impulsive,  dashing  style  in  making  purchases  and 
sales,  he  was  a  supple  tool  in  the  hands  of  his  prin- 
cipals. The  private  office  of  William  Heath  & 
Co.  was  chosen  as  the  head-quarters  of  the  clique. 
The  services  of  other  brokers  were  retained  to  ne- 
gotiate settlements  with  the  bears.  A  brigade  of 
other  agents  and  sub-agents  was  marshalled,  to  help 
on  the  movement  as  they  best  might.  Everything 
was  now  ready  for  the  blow  to  be  struck. 

The  sun  rose  up  lightly  and  brightly  on  the  morn- 
ing of  that  black-Friday,  September  24th,  1869,  as 
though  the  day  were  to  be  a  jocund  one.  To-day 
the  play  was  to  be  played  out;  so  it  had  been  an- 
nounced by  the  theatrical  manager.  The  audience 
assembled  early ;  every  window  on  the  west  side  of 
New  Street  had  its  spectators,  the  walks  and  road- 
way were  jammed,  the  gold-room  was  packed  to  suf- 
focation. A  carriage  wheeled  into  the  street.  On 
the  back  seat  sat  the  actresses,  Miss  L.  W — ,  and  Miss 

P-  M ,  the  latter  the  queen  of  the  blonde  troupe. 

"  Her  lips  were  red,  her  looks  were  free, 
Her  locks  were  as  yellow  as  gold." 

A  thick-set,  blue-eyed  man,  dressed  in  magnificent 


THE   PLAY   PLATED    OUT.  519 

costume,  and  perfumed  like  a  milliner,  descended  from 
the  carriage,  and  entered  the  office  of  William  Heath 
&  Co.  It  was  James  Fisk,  Jr.,  "  the  oiled  and  curled 
Assyrian  Bull"  of  Wall  Street.  He  came  prepared 
to  play  a  part,  but  in  no  mimic  drama.  The  curtain 
rose  with  gold  at  143  J.  Fifty  men,  the  agents  of  the 
conspirators,  put  their  shoulders  under  it,  and  held 
it  like  a  rock,  while  a  hundred  bear-hammers  rained 
blows  upon  it  as  if  it  were  an  anvil.  The  price  rose 
swiftly,  145,  146,  147,  148,  149,  and  at  eleven,  gold 
stood  at  150.  The  duo,  James  Fisk,  Jr.  and  Jay 
Gould,  sat  in  their  head-quarters.  The  business  of 
the  former  was  to  hold  up  the  price  on  his  broad  back. 
The  latter  sat  cool  and  silent,  watching  the  battle,  pre- 
paring new  moves,  and  whispering  low  his  orders  to 
his  lieutenant,  the  irrepressible  Fisk. 

Meanwhile  the  other  agents  were  busily  at  work 
frightening  the  bears  into  settlements.  The  bears 
hurled  defiance  in  their  teeth.  "Up  she  goes,  then," 
cried  Fisk,  and  in  five  minutes  gold  was  selling  for 
160.  Albert  Speyers  bought  during  the  morning, 
$26,000,000. 

William  Heath,  on  the  order  of  the  duo,  wedged 
his  way  through  the  throng  and  bid  160  for  $1,000,000. 
The  bid  was  followed  by  an  appalling  silence.  The 
crowd  saw  Heath,  the  cautious,  steady  broker,  rarely 
seen  personally  in  the  gold-room,  now  standing  in  the 
thickest  of  the  throng,  and  heard  him  bidding  for  a 
million.  No  one  was  bold  enough  to  meet  the  bid. 
He  stood  only  for  an  instant,  with  his  finger  poised 
high  in  the  air,  and  then,  as  if  with  some  presentiment 
of  the  coming  panic,  he  wheeled  and  fled  from  the 
room. 


520  INSIDE    LIFE  IN   WALL    STREET. 

Many  of  the  bears,  terrified  at  last,  were  now  pour- 
ing into  the  office  of  Smith,  Gould,  Martin  &  Co.,  of 
which  firm  Jay  Gould  is  a  partner,  and  were  settling 
up  their  contracts  to  the  amount  of  millions.  But 
the  heavy  foreign  bankers  still  stood  firm  under  the 
standard  of  Brown  Bros.,  Duncan,  Sherman  &  Co., 
Seligman,  and  others. 

"Settle  up!"  shrieked  the  cornerers. 

"Never!  do  your  worst,"  was  the  retort. 

Up  it  went,  then,  to  162  £,  while  Speyers  bid  for 
any  number  of  millions.  The  bear  leaders  wiped 
their  brows,  and  prayed  that  Boutwell  or  night  would 
come.  High  noon  was  "  clashed  and  clamored  from 
a  hundred  towers." 

While  Speyers  was  bidding  furiously  for  gold  at 
160,  Gould  was  selling  all  the  gold  he  could  through 
a  dozen  different  brokers,  at  135  to  140,  and  still 
Speyers,  his  black  eye  flaming,  and  his  wrinkled  face 
purple  with  excitement,  kept  up  his  bids,  "160  for  a 
million,  160  for  any  part  of  a  million."  He  bought 
seven  millions  in  two  lots,  when  a  shiver  ran  through 
the  crowd  as  some  one  cried  out,  "the  Government 
is  selling."  How  much  ?  "  Thirteen  millions ! "  rang 
out  the  voice  of  some  bold  bear.  Down,  down  fell 
the  price,  twenty-five  per  cent,  in  two  minutes,  and 
then  up  again  to  160,  like  a  gigantic  shuttlecock,  as 
some  one  cried  out,  "  the  Government  will  only  sell 
four  millions."  Speyers  brandished  his  arms  and 
shrieked  only  seven  words,  "160  for  a  million." 
Winged  missiles,  bids  and  offers  hurtled  through  the 
dense  air  for  an  instant,  and  then  the  bear-hammers 
seemed  to  have  been  all  welded  into  one  great  sledge, 
which  fell  upon  the  price  like  a  forty-ton  boulder,  and 


RUIX  INCARNATE.  521 

smashed  it  down  to  135,  while  Speyers  fell  back  into 
the  crowd,  quivering  like  an  aspen.  Lights  seemed 
to  dance  before  the  eyes  of  the  multitude,  and  then 
go  out  in  darkness,  as  they  rushed  tumultuously  into 
Broad  Street. 

From  Wall  Street  to  Exchange  Place  there  was  a 
sea  of  bewildered,  pallid  faces.  The  wildest  rumors 
wrere  afloat,  but  none  worse  than  the  ruinous  facts 
which  stared  all  in  the  face.  Frenzied  operators 
hurled  curses  at  the  clique  leaders,  and  battered  at  the 
offices  of  Smith,  Gould,  Martin  &  Co.,  which  were 
closed  and  barred,  while  hard-featured  men,  deputy- 
sheriffs  and  shoulder-hitters,  guarded  the  avenues 
which  led  to  the  head-quarters  of  the  conspirators. 

A.  Speyers,  looking  like  a  goblin  rather  than  a 
man,  with  dim  eyes  and  face  as  pale  as  ashes,  was 
vibrating  between  the  offices  of  Smith,  Gould,  Martin 
&  Co.  and  William  Heath  &  Co.  His  limbs  moved 
automatically.  His  fortune  of  one  million  dollars 
had  been  swept  away  in  five  minutes.  In  the  Gold 
Bank,  on  Thursday,  the  23d,  $239,000,000  of  clear- 
ances had  dizzied  the  arithmetic  of  a  hundred  pallid 
accountants.  On  Friday,  the  24th,  $500,000,000 
more  paralyzed  them.  The  Gold  Bank  tottered ;  its 
assets  had  been  loaned  to  shaky  firms;  and  this 
mighty  foster-mother  of  speculation  passed  into  the 
hands  of  a  receiver. 

The  guilty  authors  of  all  these  calamities  had  slunk 
away  on  the  first  intelligence  of  the  catastrophe,  and 
were  now  buried  in  the  recesses  of  Erie  Castle  in 
Twenty-third  Street. 

But  ten  days  before,  and  Wall  Street  had  been 
waving  with  banners  of  pride  and  fortune ;  on  Satur- 


522  INSIDE    LIFE  IN  WALL    STREET. 

day,  the  25th,  it  was  a  Golgotha — a  place  of  skulls. 
The  celebrated  firm  of  William  Heath  &  Co.,  it  was 
claimed,  were  responsible  for  millions  of  gold  which 
Fisk,  without  any  authority  from  them,  had  ordered 
to  be  delivered  to  them.  In  this  supreme  hour,  they 
had  nearly  one  million  dollars  locked  up  in  the  gold 
bank  until  clearances  could  be  made.  But  the  mar- 
gins on  the  gold  they  were  carrying,  had  been  wiped 
out  in  an  instant,  and  the  clique  owed  them  an  im- 
mense sum.  Thus,  although  they  had  no  interest  in 
the  conspiracy,  they  were  made  to  suffer  by  it.  The 
situation  of  a  firm  standing  so  high,  added  to  the 
general  distrust.  Fortunately  the  gold  bank  soon 
released  the  funds  so  locked  up,  and  enabled  the  firm 
to  resume  payment. 

Ten  of  the  other  principal  gold  dealers  were  known 
to  have  failed.  Some  of  the  great  banking  houses 
were  reported  as  shaky.  No  one  knew  in  whom  to 
confide.  Many  whose  assets  were  in  the  possession 
of  the  gold  bank,  suspended  temporarily.  Scarcely 
one  was  a  gainer  by  the  collapse.  The  street  was  full 
of  the  rueful  faces  of  those  who  had  settled  their 
short  contracts  with  the  clique.  They  who  had  sold 
gold  to  Speyers  for  account  of  Belden,  were  little 
better  off;  their  profits  were  in  the  form  of  lawsuits. 
One  bold  operator  had  gone  short  of  gold  at  160,  to 
the  amount  of  $7,000,000.  When,  gold  fell,  he  cov- 
ered his  contracts  at  from  135  to  140,  but  the  parties 
to  whom  he  had  sold  failed,  and  he  found  instead  of 
making  a  profit  of  $2,000,000,  that  he  was  saddled 
with  $7,000,000  of  gold,  which  was  selling  five  per 
cent,  below  the  price  at  which  he  had  bought.  His 
losses  were  more  than  $300,000. 


GAZING   AT   THE   RUINS.  523 

There  was,  however,  one  operator  who  brought  in 
"jetsam  and  flotsam  "  out  of  the  wreck.  He  had,  on 
the  morning  of  the  24th,  nothing  in  the  shape  of 
property,  except  his  seat  in  the  Gold  Board.  Having 
nothing  to  lose,  and  everything  to  gain,  he  boldly 
sold  half  a  million  at  the  highest  point,  and  luckily 
the  dealer  to  whom  he  sold  was  able  to  respond  and 
receive  the  gold.  On  the  next  day  the  seller  took 
as  his  profits  more  than  $100,000. 

Kight  fell,  but  brought  no  rest.  A  crowd  of  well- 
dressed  barbarians  thronged  the  halls  of  the  Fifth 
Avenue  Hotel.  Men  sat  on  chairs,  speechless  and 
stupefied  by  their  fall  in  an  hour,  from  affluence  to 
beggary.  Others  sought  to  drown  recollection  in  deep 
drinking.  One  man  stood  leaning  against  a  column, 
feebly  gesticulating,  and  moaning,  "Lost,  lost!" 
Still  wilder  rumors  filled  the  air,  while  the  gossips 
stood  in  groups,  and  discussed  the  fate  of  their  fellows. 
The  liabilities  of  the  clique  were  rated  at  $20,000,000, 
all  incurred  in  the  space  of  an  hour.  What  their 
profits  might  be,  was  the  cloudiest  of  problems. 

Saturday  dawned  upon  a  market  in  ruins.  The 
fires  of  yesterday,  smouldering,  showed  the  full  ex- 
tent of  the  disaster,  to  the  crowd  which  once  more 
packed  the  sidewalks  of  Broad  Street.  Half  of  the 
firms  which  did  business  in  the  gold-room  were  re- 
ported as  having  failed,  and  the  rest  were  suspected. 
The  street  was  full  of  lawyers.  The  gates  of  the 
ring  in  Broad  Street  and  at  Erie  Castle  were  still 
guarded,  while  a  host  of  creditors  pressed  forward, 
and  asserted  claims  for  millions  against  the  chief 
conspirators.  Two  aged  men  could  have  been  seen 
slowly  making  their  way  through  the  throng.  They 


524  IXSIDE    LIFE  IN   WALL    STREET. 

were  Cornelius  Vanderbilt,  who  came  to  lend  courage 
to  their  stock  cliques,  by  his  presence,  and  Daniel 
Drew,  who  surveyed,  with  strange,  puzzled  look, 
the  ruin  just  wrought  by  some  of  his  youngest 
pupils. 

But  the  worst  was  not  yet.  The  darkness  which 
had  fallen  upon  the  market  about  noon  on  Friday, 
that  day  of  financial  wrath  and  doom,  still  brooded 
over  it — thunderings  lightnings  and  thick  darkness. 
Monday  brought  no  relief.  Firms  failing  by  the  score, 
wild  faces,  painted  by  ruin  a  dead  white,  were  flit- 
ting about  the  market.  Human  scorpions  seemed  to 
have  been  bred  in  an  hour,  who  turned  and  stung 
those  who  but  lately  were  their  dearest  friends.  The 
engine  of  the  law  was  set  at  work.  Equity ! — Heaven 
save  the  mark! — put  on  the  mask  of  injunctions,  and 
came  into  court  with  unclean  hands.  The  Gold  Bank, 
the  Gold  Room,  the  Stock  Exchange,  and  a  dozen 
prominent  firms  were  tied  up  with  orders  by  the 
court. 

And  now  money  tightened,  first  to  100,  then  to  300 
per  cent,  per  annum ;  and  four  per  cent,  a  day  was 
charged  for  carrying  New  York  Central. 

A  new  disaster  was  soon  to  take  place.  The  house 
of  Lockwood  &  Co.  had  a  capital  of  $5,000,000,  and 
an  unspotted  credit  of  twenty-five  years'  standing. 
Who,  on  the  first  of  September  would  have  dared  to 
predict  the  failure  of  this  house  ?  Their  name  was  a 
tower  of  strength  on  'Change.  The  senior  member 
of  the  firm  had  expended  nearly  $1,000,000  on  a 
private  residence  in  his  native  village  in  Connecticut. 
Everything  promised  a  lengthened  career  of  wonder- 
ful prosperity. 


SAVED   AS   BY   FIEE.  525 

But  their  time  was  come.  They  were  loaded  down 
with  untold  amounts  of  Pacific  Mail,  Lake  Shore,  and 
Chicago  and  North-western  railroad  stocks,  on  which 
the  loss  was  millions,  and  with  money  at  from  300  to 
1200  per  cent,  per  annum. 

The  rooted  pillars  of  the  temple  began  to  totter, 
and  the  Philistines  trembled  when  Sampson  bowed 
himself.  (The  Commodore  is  our  Sampson.)  Rumor 
said  that  he  had  been  thwarted  in  his  pet  scheme  of 
consolidation  by  Lockwood  &  Co.  He  had  fed  fat 
his  grudge  by  loading  them  down  with  Lake  Shore 
stock  at  high  prices. 

Wednesday,  the  market  rallied,  and  everything 
looked  bright,  when  a  dreadful  whisper  was  breathed, 
— "Lockwood  &  Co.  have  failed." 

It  was  true.  Then  stocks  came  on  the  market  like 
a  landslide  from  the  mountain  tops.  Down!  down! 
New  York  Central  fell  to  145 — seventy- three  per 
cent,  from  the  highest  point.  Sweeping  away  a  hun- 
dred great  fortunes  as  it  fell,  a  hundred  more  rested 
on  the  ability  of  one  man  to  withstand  the  pressure. 
The  whole  market  trembled  when  a  report  ran 
through  the  street  that  the  ring  was  now  depressing 
stocks,  and  that  Jim  Fisk  had  sworn  that  he  would 
break  Yanderbilt.  Vain  boast ! 

Suddenly  Lake  Shore  sprang  up  like  magic.  The 
Commodore  raised  millions  and  carried  his  point.  He 
held  the  key  to  the  gates  of  the  West.  He  had  Lake 
Shore  in  his  grip.  Then  he  snatched  at  Central.  If 
that  should  break  lower,  no  one  could  picture  the  ruin 
that  would  follow.  He  held  it  and  then  hoisted  it. 

The  market  felt  the  stimulant.  The  friends  of 
Vanderbilt  came  to  the  rescue.  Telegrams  from  dis- 

32 


526  INSIDE    LIFE   IN  WALL   STREET. 

tant  cities  poured  in,  offering  uncounted  sums  to  the 
great  consolidator.     He  was  saved. 

Of  all  memorable  days  in  the  annals  of  finance, 
from  the  palmiest  hour  of  the  merchant  princes  of 
ancient  Tyre  to  this  year  of  grace,  the  closing  days 
of  September,  1869,  were  the  most  memorable.  Vast 
fortunes  won  and  lost  in  a  breath,  but  many  more 
lost  than  won ;  firms  overthrown  whose  names  were 
a  tower  of  strength ;  houses  hitherto  bright  and  stain- 
less, tarnished  by  foul  slanders ;  misery  and  penury 
inflicted  on  thousands  by  one  calamity,  from  the 
effects  of  which  Wall  Street  has  not  yet  recovered. 


CHAPTER  XXXIV. 
AFTER    THE    STORM. 

The  Wrecks  of  the  Market— Folios  of  Litigation— Fisk  and  Gould  at 
Bay — Erie  Castle  Besieged — Settling  up — How  the  Conspirators  Ex- 
tricated Themselves  from  their  Position — A  Bluff  Game  and  a  Sharp 
Game — Woodward  Comes  to  the  Front — History  of  his  Operations  in 
Reading  and  Rock  Island— His  Downfall,  Never  to  Rise  Again — The 
Franco-Prussian  Gold  Rise  and  Break — How  the  Germans  Outwitted 
the  Yankees. 

?HE  shock  of  Black  Friday  produced  no  ordi- 
nary effect  upon  the  speculative  movements 
in  Wall  Street.  Many  months  elapsed  before 
the  Stock  Market  recovered  its  normal  condition 
and  a  score  of  strong  houses,  even  after  the  lapse  of 
nearly  three  years,  scarcely  regained  the  position  they 
held  before  that  calamity. 

The  four  streets  which  bound  the  Stock  Exchange 
were,  for  many  weeks  after  that  event",  haunted  by  the 
sedate,  wrinkled  faces  of  lawyers,  whose  services  had 
been  enlisted  in  order  to  hasten  the  settlement  of  the 
enormous  transactions  of  the  eventful  week  ending 
Thursday  night,  Sept.  30th.  Indeed,  for  a  season  the 
whole  street  seemed  likely  to  be  enveloped  in  the 
meshes  of  the  law.  The  gold  ring,  and  all  its  agents 
and  sub-agents,  as  well  as  the  gold  bank  and  its  five 
hundred  dealers,  were  already  groaning  under  a  mul- 


528  INSIDE   LIFE   IN   WALL    STREET. 

titude  of  injunctions,  counter-injunctions,  attachments, 
and  other  processes,  such  as  legal  ingenuity,  backed 
by  large  counsel  fees  and  facile  witnesses,  are  able  to 
devise. 

The  ruin  or  safety  of  half  the  brokers  of  the  Board 
now  turned  on  one  pivot,  viz.,  the  action  of  the  two 
arch  conspirators  who  had  organized  the  gold  ring — 
Jay  Gould  and  James  Fisk,  Jr.  Both  of  these  oper- 
ators kept  themselves  perdu  in  Erie  Castle,  whose 
doors  were  guarded  both  inside  and  out,  by  night  and 
day,  and  ingress  only  given  to  the  friends,  brokers  and 
lawyers  of  the  Ring.  No  token  of  anything  but  a 
compulsory  settlement  of  their  contracts  was  given  to 
the  public,  but  private  assurances  were  sent  to  certain 
prominent  dealers  that  their  claims  would  be  adjusted 
hi  due  time,  although  a  large  majority  of  the  pur- 
chases supposed  to  have  been  made  for  account  of 
Gould  and  Fisk  were  entirely  repudiated.  This  re- 
pudiation policy  gave  the  coup  de  grace  to  a  number 
of  small  dealers ;  while  the  larger  dealers  waited  in 
suspense  for  the  redemption  of  the  private  pledges 
made  to  them. 

That  was  a  great  load  lifted  from  the  heart  of  many 
a  heavy  holder  of  the  Fisk-Gould  gold,  when  it  was 
announced  on  'the  4th  of  October  that  certain  large 
sums  of  gold  would  be  cleared  by  the  firm  of  Smith, 
Gould,  Martin  &  Co. 

From  that  time  forth  the  settlement  in  one  way  and 
another  proceeded  with  characteristic  Wall  Street 
rapidity.  Some  of  the  creditors  were  bullied,  some 
cajoled,  some  put  off  and  some  met  with  a  stern  re- 
fusal. Private  settlements  were  made  at  a  moderate 
percentage  with  those  who  were  willing  to  compro- 


FISK  AND   GOULD  AT  BAY.  529 

mise,  and  those  who  would  listen  to  no  compromise 
were  fought  in  the  courts  by  a  score  of  able  legal 
pugilists,  to  whom  certain  judges  and  sheriffs  gave 
countenance  and  aid. 

But  two  men,  and  they  the  two  who  were  most 
deeply  interested  of  all,  could  have  shouldered  or 
evaded  such  gigantic  liabilities  without  being  carried 
down  by  them  to  utter  ruin.  As  it  was  the  astute 
mind  of  Jay  Gould  and  the  versatile  talents  and  pro- 
digious audacity  of  James  Fisk,  Jr.,  were  taxed  to 
the  uttermost  by  the  task.  In  six  months,  however, 
so  skillfully  had  matters  been  managed,  most  of  the 
acknowledged  claims  had  been  adjusted,  and  those 
which  had  been  repudiated  were,  for  the  most  part, 
abandoned  by  claimants. 

The  principal  scape-goat,  William  Belden,  who  is 
said  to  have  received  $100,000  for  his  share  of  the 
spoils,  went  into  bankruptcy  with  millions  of  liabili- 
ties, against  an  imposing  array  of  assets,  which 
consisted  mainly  of  old  claims  against  broken 
brokers. 

Wall  Street  men  have  proverbially  short  memories, 
and  it  is  safe  to  say  that  on  the  first  of  May  1870, 
"  Black  Friday "  came,  through  the  strenuous  daily 
life  of  the  market,  almost  like  a  pre-historic  tra- 
dition, out  of  which  the  twin  figures  of  the  principal 
actors  loomed  up  with  the  vastness  and  imagined 
power  of  eponymic  heroes. 

The  names  of  James  Fisk,  Jr.,  and  of  Jay  Gould  now 
seemed  to  be  no  longer  connected  with  the  current 
speculations  in  stocks  and  gold,  however  much  they 
were  seen  in  the  columns  of  the  press,  or  sounded  by 
men's  tongues  in  speculative  and  mercantile  circles. 


530  INSIDE   LIFE   IN   WALL   STREET. 

Their  reputation,  as  daring  financiers  and  desperate 
speculators  was  now  national,  and  the  scheme  which 
culminated  in  Black  Friday  was  made  the  subject  of 
a  Congressional  investigation,  which  opened  the 
mouths  of  a  multitude  of  witnesses,  who  told  such 
secrets  to  the  public  that  it  only  grew  more  amazed 
at  the  boldness  and  resources  of  these  restless  giants 
of  finance. 

It  was  not  till  the  summer  of  1870  that  any  con- 
certed speculative  movement  was  made  by  the  daily 
operators  who  frequent  the  market.  There  were  two 
notable  events  that  then  occurred  to  break  the  monot- 
ony that  had  so  long  prevailed ;  these  events  were  the 
attempted  corner  in  Reading  by  a  ring  headed  by 
W.  S.  Woodward,  and  the  rise  in  gold  caused  by  the 
Franco-Prussian  war.  Reading  had  always  been  one 
of  Woodward's  favorite  specialties;  several  tunes  he 
and  his  confreres  had  cornered  it,  and  several  times 
their  efforts  in  that  direction  had  failed.  Once  in  the 
summer  of  1868  they  had  succeeded  in  working  up 
the  price  from  90  to  112,  producing  so  close  a  corner 
for  an  hour  that  10,000  shares  had  been  bought  in 
under  the  rule,  and  a  difference  of  three  per  cent, 
made  between  cash  and  seller  three  ;  after  which  the 
price  broke  away  fifteen  per  cent.,  leaving  the  ring 
saddled  with  the  major  part  of  its  holdings.  During 
the  next  two  years  Woodward  succeeded  in  working 
off  a  portion  of  his  back  stock,  and  thereby  reducing 
his  loss :  but  a  considerable  "  jag  "  was  still  on  hand, 
and  the  ring  of  1870  had  for  its  object  the  selling  at  a 
higher  price  this  same  lot  of  stock  which  remained 
undisposed  of  in  1868. 

A  new  ring  was  organized  in  May,  1870,  but  a  ring 


WOODWARD    AND    ROCK   ISLAND.  531 

that  possessed,  outside  of  Woodward  and  S.  V.  White, 
too  little  money  to  carry  out  its  plans.  Most  of  the 
stock  bought  was  upon  credit,  and  when  the  Franco- 
Prussian  war  was  declared,  the  price  broke  away  from 
their  grip.  Woodward  endeavored  to  saddle  the  re- 
sponsibility upon  the  other  and  weaker  members  of  the 
ring — the  ring  brokers  refused  to  release  Woodward— 
a  fierce  and  protracted  lawsuit  followed,  which  ended 
in  the  recovery  of  a  judgment  against  Woodward  and 
White  for  more  than  $100,000. 

This  transaction  impaired  Woodward's  credit,  and 
led  the  street  to  suspect  that  his  resources  were  less 
ample  than  had  been  theretofore  believed ;  it  was  the 
first  step  downwards  from  the  high  position  he  had 
held. 

The  subsequent  career  of  this  noted  operator  was 
brought  to  an  abrupt  termination  in  the  summer  of 
1871.  He  had  engaged  in  a  giant  speculation  which 
aimed  to  lift  the  whole  capital  stock  of  Rock  Island 
from  110  to  175.  He  had  secured  in  the  form  of  cash 
stock  or  options,  100,000  shares,  and  had  sold  puts  to 
an  enormous  amount,  by  some  rated  at  300,000  shares, 
upon  which  basis  he  had  worked  up  the  price  to  130. 
It  was  a  desperate  venture.  He  had  strained  his 
credit  to  the  utmost  in  order  to  carry  the  price  to 
those  figures.  A  multitude  of  commission  houses  had 
been  employed  to  carry  the  stock  and  manipulate  it, 
and  scores  of  sanguine  young  operators  had  bought 
"  puts  "  of  him  and  used  them  as  margins  to  buy  stock, 
in  the  firm  belief  that  they  could  sell  it  at  175. 
Woodward  himself  was  an  old  and  adroit  dealer  in 
'"  puts  ";  he  had  learned  their  value  as  a  part  of  the 
enginery  of  pools  from  Henry  Keep,  than  whom  no 


532  INSIDE    LIFE   IN   WALL    STREET. 

more  successful  tactician  had  ever  manoeuvered  on  the 
Wall  Street  battle-field. 

For  two  weeks  in  June,  Woodward's  activity  was 
incessant;  from  his  headquarters-  in  William  Street, 
through  Exchange  Place,  Broad  Street,  and  so  around 
into  New  Street,  he  passed  from  office  to  office  of  his 
agents,  bolstering  them  up  with  his  personal  presence, 
promises,  and  orders,  rather  than  with  money.  The 
kite  darted  up  bravely,  and  the  busy  little  man  clung 
manfully  to  its  tail  as  it  sailed  through  the  empyrean, 
and  kept  it  steady  to  the  favoring  breezes  by  the 
weight  of  his  remaining  fortune.  Four  days  it 
danced  about  at  the  dizzy  height,  where  it  was  freely 
supplied  with  string  by  "  the  boys  "  at  the  other  end : 
then  it  commenced  to  perform  strange  gyrations :  it 
ducked  and  rose  again  in  the  yielding  fluid.  These 
performances  soon  began  to  increase  in  length  of  vi- 
bration and  suddenness  of  motion;  "it's  all  right," 
shrieked  Woodward."  "Hey!  for  175,"  echoed  "the 
boys."  Just  at  this  juncture  those  who  held  the  string 
of  this  famous  kite,  looking  towards  the  zenith,  saw 
Woodward  loosen  his  hold  as  the  kite  turned  swiftly  and 
made  one  long  plunge  downwards,  striking  the  earth 
twenty  points  below.  The  unfortunate  kite-flyer  was 
picked  up  stunned  and  breathless  and  carried  into  a 
neighboring  office,  where  the  financial  doctors,  soon 
pronounced  it  a  hopeless  case.  To  come  down  from 
the  region  of  metaphor  to  sober  matter  of  fact,  Wood- 
ward was  irretrievably  ruined ;  his  liabilities  amounted 
to  nearly  $2,000,000,  which  his  assets  failed  to  meet 
by  a  deficiency  of  more  than  one  and  a  half  millions. 

It  was  very  clear  that  both  the  pecuniary  resources 
and  the  financial  abilities  of  Woodward  had  been 


SURVEYING   THE    SITUATION".  533 

grievously  overrated  by  his  brokers  and  those  who 
trusted  him.  His  strong  point  was  his  skill  in  manip- 
ulating stocks ;  otherwise  he  was  deficient  particularly 
in  those  long-headed  qualities  which  made  Jerome, 
Keep,  and  Vanderbilt  the  successful  operators  they 
were. 

From  the  Rock  Island  break  till  the  present  hour 
AVoodward  has  ceased  to  be  one  of  the  forces  of  the 
market ;  he  seemed  to  drop  out  of  sight  even,  and 
though  he  is  still  an  occasional  operator,  his  name  only 
serves  to  point  a  new  edition  of  the  old  but  disregard- 
ed moral  taught  by  the  ruined  speculator. 

Let  us  return  now  to  the  most  notable  movement 
in  the  Summer  and  Fall  of  1870,  viz  :  the  Franc  j- 
Prussian  Gold  Speculation. 

It  will  be  remembered  that  when  the  great  gold 
conspiracy  was  formed  which  culminated  in  the  trans- 
actions of  Black  Friday,  the  price  stood  near  130 
when  it  seemed  as  if  the  finger  of  a  child  might  have 
tumbled  it  down  to  120.  After  Fisk  &  Gould  began 
to  survey  the  situation  on  Saturday,  the  day  following 
the  crash,  they  saw  at  once  that  they  must  unburden 
themselves  of  every  dollar  of  cash  gold.  To  decide  was 
to  act  with  them  in  the  hour  of  their  peril,  and  at  the 
earliest  possible  moment  they  threw  overboard  their 
holdings  and  the  price  sunk  down  to  127  from  which 
point  it  broke  swiftly  away  and  leaped  in  a  few  long 
bounds  at  intervals  down  to  110.  The  speculation  in 
the  gold  room  following  the  resumption  of  the  gold 
bank  had  been  dwindling  for  months  into  small  pro- 
portions ;  few  dared  to  buy  or  sell  heavily,  such  was 
the  demoralization  caused  by  the  losses  of  Black  Fri- 
day:  in  fact  the  speculation  in  the  precious  metal 


534  INSIDE    LIFE    IN   WALL    STREET. 

seemed  destined  to  pass  away,  and  men  began  to  look 
forward  hopefully  to  the  resumption  of  specie  pay- 
ments, more  especially  as  the  rapid  payment  of  the 
five-twenty  bonds  justified  the  expectation  that  the 
government  would  soon  be  able  to  pay  gold  for  every 
dollar  of  the  greenback  issue.  An  event  now  hap- 
pened which  revived  the  gold  speculation  and  dissi- 
pated for  a  long  time  to  come  the  hopes  which  mer- 
cantile men  had  commenced  to  entertain. 

We  allude  to  the  Franco-Prussian  War  of  1ST 0-1. 

A  war  between  the  French  and  Germans  had  ever 
since  the  battle  of  Sadowa  been  the  bug-bear  of  the 
gold  room.  It  was  only  necessary  to  flutter  over  the 
heads  of  the  impressible  crowd  a  telegram  containing 
some  plausible  statement  of  Franco-Prussian  complica- 
tions and  up  the  price  would  go  one  or  two  per  cent. 
In  fact  for  four  years  the  bulls  relied  upon  these  rumors 
as  their  stock  in  trade,  and  the  street  had  been  so  often 
deceived  and  so  thoroughly  "  milked"  by  this  device, 
that  it  became  stale  at  last,  and  like  the  cry  of  "wolf 
in  the  fable,  ceased  to  exert  any  but  the  feeblest  in- 
fluence upon  the  market. 

Early  in  the  summer  of  1870,  some  of  the  largest 
German  bankers,  the  Seligmans,  Von  Hoffman  &  Co., 
and  others,  having  received  intelligence  from  a  high 
source  in  Germany,  had  bought  largely  of  gold  at 
about  111.  A  few  weeks  later,  when  rumors  came 
thick  and  fast  of  trouble  between  France  and  Prussia, 
a  host  of  small  operators,  who  had  often  before  been 
deceived,  laughed  at  these  rumors  and  sold  short  at 
112.  They  soon  learned  that  this  was  no  false  alarm, 
and  as  the  corps  d'armee*  of  Napoleon  marched  towards 
the  Rhine,  and  the  vineyards  of  Alsace  echoed  with 


THE   FRANCO-PRUSSIAN   GOLD  RISE.  535 

the  "Marseillaise"  and  " Pourtant  pour  la  Syrie,"  when 
wilder  rumors  were  started  of  financial  movements 
which  would  draw  a  hundred  millions  of  gold  from 
America  to  France  and  Germany,  the  price  jumped 
under  enormous  purchases  plump  to  122!  Already 
men  were  predicting  a  speculation  like  that  of  1866, 
when  the  price  jumped  from  130  to  169 ;  the  Ger- 
man bankers  however  knew  better;  they  had  soon 
after  the  war  broke  out  ascertained  the  financial  con- 
dition of  Germany;  they  knew  that  few  securities 
would  come  back  to  America  for  sale,  and  that  little 
gold  would  be  shipped  abroad  ;  the  corollary  from  this 
fact  was  a  fall  and  not  a  rise  from  122.  The  Amer- 
ican houses,  or  at  least  many  of  them,  being  less 
informed  of  the  situation  in  Europe,  with  character- 
istic impetuosity  bought  large  sums  of  the  German 
bankers  above  120,  which  they  had  sold  to  them  at 
112.  The  price  soon  broke  120. 

There  was  another  reason  why  the  German  houses 
were  now  willing  to  sell  gold.  They  had  great  confi- 
dence in  a  speedy  termination  of  the  war  and  in  the 
complete  victory  of  the  Prussians.  How  right  they 
were  in  these  conclusions  the  event  has  proved,  though 
it. was  a  surprise  even  to  them  when  a  few  days  later 
news  came  that  the  Emperor  Napoleon  had  surren- 
dered at  Sedan  with  a  quarter  of  his  whole  army,  and 
gold  dropped  like  lead  to  113. 

This  stroke  of  the  German  bankers  was  a  kind  of 
revenge  for  the  heavy  losses  which  they  incurred  hi 
the  Fisk-Gould  raid. 

Then  followed  another  interval  of  calm  ;  gold 
wagged  feebly  between  110  and  112.  Stocks  vibrated 
in  narrow  areas  of  two  per  cent. ;  the  whiter  of  1871 


536  INSIDE   LIFE   IN    WALL   STKEET. 

passed  away  with  scarcely  a  sensation  to  flutter  the 
sedate  course  of  the  market.  But  all  during  this  dull 
season  events  of  a  startling  nature  were  slowly  germ- 
inating ;  it  was  reserved  for  the  two  following  years 
to  fill  their  whole  cycle  with  financial  movements  and 
incidents  almost  as  remarkable  and  interesting  as  any 
two  years  of  the  preceding  decade. 


CHAPTER  XXXV. 
THE   GREAT   RINGS   OF   1871  AND   1872. 

The  alliance  between  politicians  and  financiers — How  rings  are  formed — 
The  Bank  and  Treasury  ring — The  Pennsylvania  Central  monopoly — 
The  Vanderbilt  combination — The  Fisk-Jay  Gould  ring — Antecedents 
and  character  of  Jay  Gould — Operations  of  the  Erie  ring — Position  of 
Vanderbilt  in  1868  and  1873— His  lieutenants,  Horace  F.  Clark  and 
Augustus  Schell — Other  railroad  cliques — The  strength  of  the  great 
rings  in  1873. 


1862  when  the  greenback  speculation  be- 
gan until  the  present  hour,  the  tendency  in 
the  stock  market  and  in  the  whole  financial 
system  of  the  country,  has  been  towards  a  con- 
centration of  money  and  therefore  power  in  the  hands 
of  a  few.  A  class  of  men  has  arisen  which  mixed  pol- 
itics and  finance,  strengthening  themselves  in  each  by 
the  aid  of  the  other.  The  securities  in  which  these  men 
interested  themselves  were  the  stocks  and  bonds  of 
railways.  But  as  railway  law  is  of  very  recent  date  and 
is  still  unsettled,  these  railway  financiers  soon  saw  the 
necessity  of  allying  themselves  with  politicians  and  leg- 
islators for  the  purpose  of  shaping  the  course  of  legisla- 
tion to  suit  their  own  interests.  Out  of  this  wedlock  of 
politics  and  finance  came  a  monstrous  brood  of  schemes, 
which  under  the  color  of  law  aimed  to  levy  vast  taxes 
upon  the  general  public  for  the  benefit  of  a  few.  So 
successful  were  these  schemers  at  their  initiation,  and 


538  INSIDE   LIFE   IN  WALL   STREET. 

• 

so  passive  were  the  general  public  under  their  opera- 
tions, that  they  were  multiplied  and  grew  in  volume 
and  scope,  until  at  present  they  threaten  to  thrust 
aside  the  common  law  of  the  land  and  become  para- 
mount over  legislatures,  courts,  and  even  constitutions. 

Year  by  year  this  tendency  toward  the  concentra- 
tion of  the  monied  power  in  the  hands  of  a  few  con- 
tinued to  operate  until  in  1871,  a  half  dozen  separate 
combinations  of  men  controlled  the  railways  and  the 
financial  institutions  of  the  country.  These  separate 
combinations  had  their  chiefs  who  were  able  to  organ- 
ize into  the  unity  and  rapidity  of  a  few  individual 
wills,  the  natural  and  artificial  money-forces  of  a 
powerful  nation. 

The  system  of  national  banks,  however  conven- 
ient and  plausible  it  may  have  seemed  at  the  time 
of  its  adoption,  was  in  fact  a  monopoly  of  the  business 
of  banking  created  and  sustained  by  the  national  gov- 
ernment. The  national  banks  soon  saw  that  they 
must  stand  together  against  outside  influences,  and  this 
necessity  for  union  compelled  them  to  form  a  quasi 
combination  which  has  been  styled  by  the  independ- 
ent press  "The  National  Bank  Ring." 

Another  politico-financial  combination  is  styled  again 
by  the  press  "  The  Treasury  Ring." 

The  great  arteries  of  the  railway  system  have  fallen 
under  the  control  of  a  few  rich  and  unscrupulous 
combinations.  One  of  these  was  the  Pennsylvania 
Central  combination,  which  now  holds  by  lease  or 
otherwise,  five  thousand  miles  of  railway,  and  is  still 
grasping  after  fresh  lines.  Another  was  the  Van- 
derbilt  combination,  which  holds  under  its  manage- 
ment, actually  or  virtually,  several  thousand  miles  of 


CHARACTEKISTICS    OF   JAY   GOULD.  £39 

railway;  but  in  1868-9  70,  71,  and  72,  perhaps 
the  most  compact  and  powerful  railway  ring  was 
that  of  which  James  Fisk,  Jr.,  and  Jay  Gould 
were  the  chiefs :  the  former  of  these  noted  stock  ope- 
rators we  have  described  in  chapter  thirty-first ;  the 
latter,  who  was  the  abler  man  of  the  two,  deserves  a 
more  extended  notice  than  we  have  yet  given  him. 

Born  in  Roxbury,  a  small  village  in  Delaware 
county,  New  York,  he  early  manifested  those  qualities 
of  intellect  which  have  since  made  him  the  controller 
of  great  railway  lines  and  the  acknowledged  king  of 
the  stock  market.  Bold  and  yet  not  reckless,  quick 
to  acquire  knowledge,  resolute  in  purpose,  patient  of 
toil,  acute  in  his  judgment  of  men  and  things,  rapid 
in  his  decisions,  following  a  plan  tenaciously  as  long  as 
it  promised  well, but  abandoning  it  whenever  it  seemed 
likely  to  fail  and  adopting  something  better —  to  these 
qualities  he  added  a  bodily  organization  remarkably 
enduring,  wiry,  and  compact.  Thus  endowed,  and 
without  the  taste  for  pleasure  which  sometimes  besets 
and  drags  down  noted  financiers,  he  was  well  fitted  by 
nature  to  play  a  prominent  part  in  the  great  theatre 
of  speculation. 

He  seems  from  the  start  to  have  been  attracted  to 
the  profession  of  a  railway  man,  a  profession  now  dis- 
tinct, and  requiring  to  some  extent  a  distinct  educa- 
tion. We  cannot,  from  want  of  space,  describe  his 
earliest  essays  in  that  field,  which  proved  that  though 
a  boy  in  years,  he  even  then  possessed  the  mind  of  a 
man. 

He  made  his  appearance  in  "Wall  street,  soon  after 
the  greenback  speculation  commenced,  and  as  early 
as  1867  he  had  identified  himself  with  those  great 


540  INSIDE   LIFE   IN   WALL    STREET. 

speculative  enterprises,  which  had  already  begun  to 
assume  the  shape  which  they  have  since  taken. 

James  Fisk,  Jr.,  as  we  have  already  remarked,  was 
a  very  different  man  from  Jay  Gould,  and  it  was 
perhaps  this  contrariety  that  brought  them  so  closely 
together.  In  the  Drew-Eldridge  party  they  appear 
as  co-directors  of  the  Erie  Railway  Company  in  1867. 
By  a  kind  of  natural  affinity  they'  adhered  to  Drew 
in  the  schism  which  a  few  months  later  took  place  in 
the  Erie  Board,  and  thus,  in  January  1868,  they  found 
themselves  arrayed  against  Vanderbilt,  in  the  contest 
which  we  have  described  in  chapter  thirty-second. 

In  the  summer  of  1868,  they  were  the  controlling, 
spirits  of  the  Erie  Eailway,  this  corporation  having 
been  assigned  to  them  as  their  portion  of  the  Drew- 
Vanderbilt  division  of  spoils,  the  most  valuable  por- 
tion, as  it  afterward  turned  out.  The  first  step  taken 
to  strengthen  their  position,  was  an  alliance  with  Tam- 
many. This  secured  them  subservient  judges  and 
pliant  sheriffs,  in  the  city  of  New  York,  and  favorable 
legislation  at  Albany. 

The  passage  of  the  classification  act  assured  them 
of  a  prolonged  continuance  in  the  Erie  direction. 
They  had  full  swing  now  at  the  income  of  the  com- 
pany, which  amounted  already  to  $16,000,000  per  an- 
num. How  well  they  availed  themselves  of  their 
opportunities,  time  has  shown. 

During  the  five  years  and  five  months,  commenc- 
ing April  1st,  1868,  and  ending  September  1st,  1873, 
the  Vanderbilt  party  had  grown  very  strong.  The 
Commodore  stood  at  their  head  solid  as  a  statue  of 
bronze.  Next  to  him  stood  Horace  F.  Clark,  his  son- 
in-law,  and  Augustus  Schell,  his  intimate  friend  and 


THE   VANDERBILT    COMBINATION.  541 

counselor,  his  son  "Wm.  H.  Vanderbilt,  a  man  of  fine  ex- 
ecutive ability,  trained  in  the  railway  school,  and  Jas.  H. 
Banker,  an  able  financier,  President  of  the  Union  Trust 
Company — these  chiefs,  all  very  rich  and  influential 
men,  were  followed  and  aided  by  a  host  of  shrewd  an'l 
wealthy  capitalists,  bankers  and  brokers,  and  watched 
and  cheered  on  by  a  crowd  of  smaller  operators.  Ab- 
sorbing first  the  Harlem,  and  afterwards  the  Hudson 
River  and  New  York  Central  railways,  this  combination 
paused  only  to  strengthen  themselves  in  this  position 
and  then  moving  steadily  forward,  soon  took  control 
of  the  Lake  Shore  line,  and  succeeded  in  placing  Hor- 
ace F.  Clark  in  the  presidency  of  the  Union  Pacific 
Railroad.  Besides  this,  they  had  large  interests  in 
Toledo,  Wabash  and  Western,  and  Chicago  and  North- 
western, two  important  links  in  the  chain  of  trans-con- 
tinental railroads.  The  death  of  Horace  F.  Clark  in 
June,  1873,  left  vacant  the  presidency  of  Lake  Shore, 
to  which  Cornelius  Vanderbilt  himself  was  shortly 
after  elected. 

This  so-called  Vanderbilt  party  was  the  most  pow- 
erful in  the  talent  and  wealth  of  its  members  of  any 
of  the  reigning  railroad  dynasties,  and  touched  the 
financial  system  of  the  country  at  a  vast  number  of 
points.  In  the  spring  and  summer  of  1873  it  seemed 
to  hold  an  impregnable  position  in  the  stock  market. 
One  weak  point  only  it  showed  and  that  to  none  but  a 
few  of  the  shrewdest  operators;  this  point  was  the 
large  interest  which  it  had  acquired  latterly  in  the 
Western  Union  Telegraph  Company. 

This  now  famous  corporation  did  most  of  the  tele- 
graphic business  of  the  country.  It  started  with  a 
moderate  capital,  which  by  the  modern  device  of 
33 


542  INSIDE   LIFE   IN    WALL    STREET. 

watering  the  stock  had  been  in  course  of  time  swollen 
to  $41,000,000.  Under  the  effect  of  this  dilution  the 
price  had  fallen  to  30.  "While  it  ranged  .from  30  to 
40,  Vanderbilt,  who  had  been  casting  his  eye  around 
in  search  of  some  good  investment  for  his  surplus 
millions,  was  attracted  to  this  stock  as  something  which 
tjy  judicious  management  could  be  greatly  enhanced  in 
value.  He  quietly  bought  up  a  vast  amount  of  the 
stock,  and  in  1873  he  is  reputed  to  have  held  upwards 
of  120,000  shares,  or  $12,000,000  of  the  stock  at  par. 
More  than  a  year  ago  it  became  noised  abroad  that 
Vanderbilt  had  taken  hold  of  the  stock  and  would  soon 
add  it  to  the  list  of  dividend  paying  securities.  It  be- 
came immediately  one  of  the  favorite  speculative  fan- 
cies of  the  street.  The  Vanderbilt  party  of  course 
bought  it  freely,  and  outsiders  who  believed  in  the 
Commodore's  intuitions  and  plans  bought  it  with  equal 
freedom.  In  two  years  it  had  risen  fifty  per  cent., 
and  in  July,  1873,  it  stood  for  an  hour  at  93  J. 

For  many  years  the  Company  had  paid  no  dividends 
and  owed  over  $600,000,  against  which  indebtedness 
it  owned  nearly  80,000  shares  of  its  own  stock. 
Dividends  were  still  a  thing  of  the  future,  and  rival 
companies  and  newly  invented  processes  of  tele- 
graphy threatened  to  weaken  the  probability  of  the 
Company's  ultimate  success.  Western  Union,  we  re- 
peat, was  the  weak  point  in  the  Vanderbilt  organiza- 
tion, because  it  was  a  "fancy"  and  not  a  dividend  pay- 
ing security. 

Daniel  Drew  and  his  associates  also  had  certain  stocks 
under  their  control  during  the  period  of  which  we  are 
speaking,  among  others  Toledo,  Wabash  &  Western, 
Canton  and  Quicksilver,  all  of  them  stocks  of  a  specu- 


DREW   ON   THE   WAR   PATH.  543 

lative  character,  though  full  of  promise  in  the  future. 
Latterly,  Drew  became  deeply  interested  in  the  Canada 
Southern  Railroad  enterprize,  and  in  1872  and  1873  he 
pledged  his  personal  responsibility  to  a  large  amount 
for  the  purpose  of  carrying  this  line  through.  But  for 
the  past  five  years  Daniel  Drew  has  ceased  to  make 
the  figure  he  once  did  in  the  arena  of  speculation. 
Indeed,  soon  after  the  termination  of  the  Gould-Fisk- 
Drew  contest  with  Vanderbilt  in  the  winter  and  spring 
of  1868,  he  seemed  to  feel  that  he  was  unable  to  cope 
with  the  richer,  younger,  and  stronger  gladiators  of 
speculation,  and  retired  from  active  life.  It  became 
noised  abroad  not  long  after  his  retiracy  that  his  health 
was  seriously  impaired ;  he  needed  the  old  stimulus  of 
his  dealings  in  the  market  to  "  keep  him  up,"  and 
upon  the  advice  of  his  doctors  he  returned  to  his  old 
haunts  in  1869,  becoming  a  special  partner  in  the  old 
and  respectable  commission  house  of  Kenyon,  Cox  & 
Co.,  contributing  $300,000  special  capital  to  the  assets 
of  that  firm. 

The  Northwestern  and  the  Rock  Island  Railways 
were  under  the  control  of  a  separate  combination  of 
able  railroad  men.  The  former  of  these  companies  had 
passed  through  a  chequered  experience.  In  1860,  the 
stock  of  the  Chicago  &  Northwestern  line  was  worth 
little  or  nothing.  A  story  used  to  be  told  in  Wall 
street  of  a  farmer  in  Wisconsin  who  gave  a  thousand 
shares  of  it  for  a  Shanghai  rooster.  Early  in  the 
greenback  era  it  had  appreciated  to  twenty  cents  on 
the  dollar  in  a  speculative  way.  The  consolidation  of 
Galena  &  Chicago  with  this  line  in  1864  gave  solidity 
and  value  to  the  Northwestern,  while  of  course  it  re- 
duced the  value  of  Galena.  Henry  Keep  commenced 


544  INSIDE  LIFE  IN   WALL    STREET. 

speculations  largely  in  the  consolidated  stock  in  1865, 
and  in  1866  and  1867  he  advanced  the  price  of  the 
common  stock  from  30  to  60,  and  subsequently  to 
nearly  par,  by  one  of  the  most  steady  and  brilliant 
operations  on  record. 

After  the  death  of  Henry  Keep  the  Company  fell 
into  the  hands  of  the  so-called  Rock  Island  party,  of 
which  John  F.  Tracy  and  David  Dows  were  the  lead- 
ers. In  the  course  of  the  past  five  years  the  "  street" 
have  made  great  gains  and  suffered  corresponding 
losses  by  the  skillful  manipulation  of  these  two  noted 
stocks;  outside  rings  have  been  formed  which  have 
made  occasionally  large  sums  and  wealthy  operators 
have  been  made  beggars  by  the  enormous  fluctuations 
in  these  stocks.  These  outside  rings  were  mere  shift- 
ing factors ;  the  inside  ring  was  the  constant  quantity 
which  with  one  notable  exception  (viz.,  the  great 
corner  of  1872,)  absorbed  to  itself  an  invariable  profit. 

The  coal  and  iron  lines,  like  Reading,  Delaware, 
Lackawanna  &  "Western,  and  Delaware  &  Hudson,  were 
controlled  by  separate  parties,  which  united  with  each 
other  as  against  outside  interests. 

Another  of  these  associations  of  individuals  who 
aimed  to  control  stocks  for  the  purpose  of  their  own 
aggrandizement,  was  what  is  known  as  the  "  William 
street  party,"  comprising  a  number  of  wealthy  opera- 
tors who  had  their  headquarters  in  William  street,  of 
whom  were  H.  G.  Stebbins,  the  Cuttings,  Marvins, 
John  Steward,  Jr.,  &c. 

The  present  Pacific  Mail  ring,  and  the  New  York, 
Boston  &  Montreal  Railroad  combination,  should  also 
be  mentioned  as  powerful  rings  among  others  greater 
and  lesser  which  we  cannot  stop  to  describe  at  length. 


POWERFUL    COMBINATIONS.  545 

In  the  spring  of  1873  it  seemed  as  if  neither  money- 
stringencies  nor  panics  could  shake  the  power  of  these 
combinations.  Under  the  shelter  of  an  irredeemable 
paper  currency,  and  strengthened  continually  by  our 
growing  internal  and  foreign  commerce,  and  the  in- 
creasing population  of  the  country,  the  position  they 
held  seemed  to  be  impregnable. 


CHAPTER    XXXVI. 

HENRY  N.    SMITH   AND  ALDEN    B.    STOCKWELL, 
AND    THEIR    OPERATIONS. 

Henry  N.  Smith,  his  personal  appearance  and  character — The  Chicago 
Fire  Panic  and  the  rise  of  '71 — A  83,000,000  profit — Connection  of 
Smith  and  Gould— The  Hannibal  and  St.  Joseph  Pool— The  Erie  coup 
d'  elat — Effect  of  the  Assassination  of  Fisk  and  the  Expose  of  the 
Tammany  Ring— How  Drew  phlebotomized  Smith  and  Gould — Alden 
B.  Stockwell  and  his  antecedents — Sewing  up  Pacific  Mail  in  a  bag — 
Collision  of  Smith  and  Gould  with  Stockwell — The  quarrel  between 
Gould  and  Smith — The  Gould-Stockwell  party. 

^  MONO  the  noted  speculators  of  the  stock- 
market  during  the  past  five  years,  Henry  N. 


Smith  stands  forth  as  one  of  the  prominent 
figures.  He  was  long  the  senior  partner  of 
the  firm  of  Smith,  Gould,  Martin  &  Co.,  and  in  that 
position  he  was  intimately  concerned  in  the  great  ope- 
rations conducted  by  Fisk  and  Gould  during  his  con- 
nection with  that  well-known  firm.  There  is  little  in 
his  personal  appearance  to  mark  the  shrewd,  daring 
operator  that  he  is.  A  short  dapper  man  with  a  blue 
eye,  sandy  complexion,  and  what  Prof.  Huxley  would 
call  xanthus  (i.  e.  red)  hair,  a  bustling  gait,  and  an 
expression  of  face  that  tells  no  tales  of  those  opera- 
tions which  he  would  keep  concealed,  there  is  little  to 
distinguish  him  from  the  crowd  of  daring  gamblers 
which  daily  fills  the  hall  of  the  Stock  Exchange.  He 


OPEPvATIONS   OF   HENRY   N.    SMITH.  547 

made  good  use  of  his  opportunities  as  a  member  of 
the  Fisk-Gould  ring,  passed  through  the  trying  ordeal 
of  Black  Friday  though  not  unscathed,  absorbed  a 
large  line  of  profits  from  the  manipulations  of  Erie 
stock,  and  in  1870  and  '71  was  rich  enough  to  engage 
in  vast  speculations  on  his  own  account,  which  issued 
successfully  with  enormous  profits  to  himself. 

His  heaviest  stroke  was  in  the  fall  of  1871.  Stocks 
had  been  engineered  into  the  tall  figures,  and  hi  spite 
of  the  usual  autumnal  outflow  of  currency  and  the 
tendency  towards  a  more  stringent  money  market, 
they  yielded  but  little  to  the  hammering  to  which  they 
were  daily  subjected  by  the  more  ardent  of  the  bears. 

Smith  had  a  considerable  line  of  shorts  which  he 
had  for  some  weeks  hoped  to  cover  at  a  handsome 
profit ;  this  he  had  failed  to  do  prior  to  the  9th  of 
October,  when  something  happened  which  enabled  him 
to  effect  his  object. 

It  was  early  Monday  morning,  the  9th  of  October, 
1871,  that  telegrams  were  received  in  New  York  that 
Chicago  was  in  flames  throughout  its  length  and  breadth, 
and  that  unless  rain  should  fall  nothing  could  save  the 
Lake  city  from  utter  destruction.  All  the  morning 
fresh  telegrams  came  streaming  in  confirming  the  first 
news  of  the  day  and  giving  it  a  blacker  coloring.  Then 
one  of  those  inspirations  that  possess  men  at  times 
happened  to  the  speculator  of  whom  we  are  speaking. 
At  the  first  moment  that  morning  when  stocks  could 
be  dealt  in,  Smith  commenced  selling  every  active 
stock  on  the  list.  The  full  extent  of  the  disaster  in 
its  effects  upon  stocks  was  quickly  seen ;  prices  did  not 
fall,  they  plunged  downward ;  the  soundest  stocks  on 
the  list  were  hurled  downward  as  if  shot  out  of  a  rifled 


548  INSIDE   LIFE   IN   WALL    STEEET. 

cannon;  New  York  Central  struck  80;  the  fancies, 
like  North  West  common,  seemed  as  if  they  were  to 
be  swallowed  up  in  the  limbo  of  nothingness ;  the  feel- 
ing that  if  Chicago  was  destroyed  the  whole  trans- 
continental system  of  railways  would  suffer  damages 
almost  irretrievable,  was  uncontrollable  for  a  few  days 
upon  the  Stock  Exchange.  When  prices  struck  their 
lowest  point,  Smith  covered  his  contracts  and  bought 
enormously  for  a  rise. 

Within  a  week  the  community  were  amazed  at  the 
swiftness  with  which  the  burned  city  was  springing 
from  its  ashes ;  prices  began  to  rally ;  the  market  had 
been  oversold,  and  recovered  itself  with  corresponding 
rapidity.  Within  four  months  Smith  succeeded  in  dis- 
posing of  the  major  part  of  his  holdings ;  his  profits 
were  estimated  at  between  two  and  three  million.  His 
success  in  speculation  tempted  him  into  operations  on 
the  turf;  he  bought  Goldsmith's  Maid,  the  trotting 
mare  which  rivalled  Dexter ;  his  stud  containing  several 
other  trotters  almost  equally  famous ;  he  built  a  mag- 
nificent steam  yacht  at  an  expense  of  a  quarter  of  a 
million. 

Jay  Gould  and  Henry  N.  Smith,  partners  in  busi- 
ness and  friends  of  each  other,  now  were  co-rulers  of 
Wall  street.  It  is  rare  that  a  man  reaches  and  holds 
long  a  high  position  as  a  stock  speculator  without  being 
soon  reminded  that  riches  have  wings ;  Smith  was  des- 
tined to  receive  at  this  point  in  his  career  a  number  of 
serious  checks,  which  damaged  his  prestige  as  an  ope- 
rator and  made  heavy  inroads  upon  his  huge  bank 
account. 

The  first  of  these  disasters  was  in  the  Hannibal  and 
St.  Joseph  movement.  This  railroad  company  had 


A  TAMMANY   CLIQUE   IN   WALL   STREET.  549 

been  pooled  up  above  par  by  a  clique  which  comprised 
among  its  members  the  notorious  Wm.  M.  Tweed,  P. 
B.  Sweeny,  and  other  members  of  the  Tammany  ring, 
besides  Gould,  Fisk,  and  other  desperate  speculators. 
H.  N.  Smith  was  elected  President  of  the  Hannibal  and 
St.  Joseph  rpad,  and  all  would  have  gone  well,  but  a 
rival  line  (the  Burlington  and  Quincy  railroad,)  by 
building  an  extension  postponed  indefinitely  the  prom- 
ised dividends  of  the  Hannibal  and  St.  Joseph  company. 
The  price  fell  40  per  cent.  It  was  nevertheless  still 
one  of  the  favorite  fancies,  and  was  freely  bought  at 
from  60  to  70.  The  pool,  headed  by  Smith,  now  sold 
short  a  large  amount  and  then  prepared  to  make  its 
deliveries  with  50,000  shares  of  new  stock  issued  to 
order ;  these  deliveries  were  refused  by  the  Stock  Ex- 
change, and  the  pool  would  have  been  cornered  but  for 
an  accidental  decline  in  the  price,  which  enabled  Smith 
and  his  associates  to  fill  their  contracts  without  ma- 
terial loss. 

Again  in  April  12,  Smith  having  gone  short  of  the 
market,  he  attempted  to  create  an  artificial  tightness 
in  money  to  depress  the  market ;  in  order  to  carry  out 
this  scheme  he  sold  a  large  amount  of  gold,  and  de- 
positing $4,000,000  of  greenbacks  in  the  Tenth  Na- 
tional Bank,  drew  them  out  and  locked  them  up.  A 
stroke  so  bold  and  undisguised  at  once  filled  the  souls 
of  those  who  held  stocks  with  indignation.  An  in- 
vestigation of  the  matter  was  set  on  foot  simultaneously 
in  the  courts,  in  Congress,  and  in  the  associated  banks. 
Although  nothing  came  out  of  these  investigations, 
they  seemed  to  deter  any  one  from  repeating  such  an 
operation  in  the  future,  and  the  attempt  to  create  a 
stringency  in  money  to  any  marked  degree  was  a  fail- 
ure. 


550  INSIDE   LIFE    IN   WALL    STREET. 

The  assassination  of  James  Fisk,  Jr.,  in  January, 
1872,  was  like  a  thunder  clap  to  the  Erie  Ring.  The 
Tammany  explosion  of  the  preceding  fall  was  the  first 
step  towards  their  downfall,  and  now  the  removal  of 
Fisk  enabled  them  to  see  the  handwriting  on  the  wall. 
The  murdered  man  always  claimed  that  James  Fisk, 
Jr.,  was  an  essential  spoke  in  the  Erie  wheel,  and  was 
wont  to  slap  Gould  on  the  back  after  some  successful 
stroke  and  say  in  his  jocose  way,  "  Jay,  my  boy,  you 
fellows  can't  get  on  without  J.  F.,  Jr. ; "  no  doubt  there 
was  more  truth  in  this  than  perhaps  Gould  would  even 
admit ;  at  all  events  it  is  certain  that  Fisk's  fate  struck 
consternation  into  the  hearts  of  his  associates  of  the 
Erie  ring.  By  means  of  what  is  known  as  the  classi- 
fication law,  Fisk  and  Gould  were  assured  of  their 
continuance  in  the  Erie  Board  for  some  years  to  come  j 
the  fall  of  Tammany  and  the  impeachment  of  certain 
subservient  judges,  followed  by  the  death  of  Fisk, 
showed  them  how  insecure  was  their  tenure  of  power. 

For  more  than  a  year  movements  had  been  on  foot 
among  the  English  stockholders  of  Erie  to  dispossess 
Fisk  and  Gould  of  their  hold  on  that  railway  com- 
pany. These  movements  culminated  in  what  is  called 
the  Erie  coup  $  etat,  in  March  1872,  when  after  a 
sharp  fight,  Gould  was  ousted  and  the  road  passed  into 
the  hands  of  what  is  now  called  the  McHenry-Bis- 
choffsheim  party,  whose  headquarters  are  in  London. 

Notwithstanding  this  breaking  up  of  the  Erie  Ring 
and  the  loss  of  the  steady  profits  they  had  so  long 
drawn  from  their  milch  cow  Erie,  both  Gould  and 
Smith  are  said  to  have  profited  enormously  by  it 
through  the  thirty  per  cent,  rise  which  followed  the 
success  of  the  London  party.  Gould  has  since  testified 


SKETCH  OF  ALDEN  B.  STOCKWELL.       551 

under  oath  that  at  the  time  of  the  coup  cT  etat  240,000 
shares  of  Erie  stood  in  the  name  of  Smith,  Gould, 
Martin  &  Co.  The  rise  of  thirty  per  cent,  on  a  quarter 
of  this  amount  of  shares  would  have  netted  $1,800,- 
000  to  the  holders.  Gould's  profits  alone  on  this  trans- 
action are  said  to  have  been  $1,500,000. 

The  collision  of  Smith  with  Stockwell  during  the 
summer  of  1872  considerably  depleted  his  exchequer. 

Alden  B.  Stockwell  rose  like  a  meteor,  reached  the 
zenith  and  fell  within  the  space  of  two  years.  He  was 
a  westerner,  at  least  he  was  for  some  time  settled  in 
Cleveland,  Ohio,  but  having  married  the  daughter  of 
Elias  Howe,  the  sewing  machine  man,  he  became  con- 
nected with  the  Howe  Sewing  Machine  Company  in 
Bridgeport,  Ct.,  and  finally  its  President.  He  is  like 
Smith,  a  short,  stocky,  Xanthus-haired  personage,  of 
a  sanguine  temperament,  and  rather  more  than  average 
business  talents.  He  came  into  Wall  street  in  1868-9 
with  a  few  thousand  dollars,  and  prepared  quickly  and 
systematically  to  grapple  writh  "the  tiger."  His  ope- 
rations were  for  a  season  conducted  with  circumspec- 
tion, judgment,  and  secrecy. 

The  low  price  to  which  Pacific  Mail  had  fallen  after 
the  failure  of  Lock  wood  &  Co.,  set  him  to  thinking 
whether  it  would  not  pay  to  buy  some  of  it.  After 
studying  over  the  matter  he  arrived  at  the  very  wise 
conclusion  that  two  things  were  necessary  before  any 
operator  should  attempt  to  invest  largely  in  Pacific 
Mail:  First,  he  must  control  the  Panama  Railroad 
company;  second,  he  must  control  the  Pacific  Mail 
company;  thenceforward  he  bent  his  whole  energies 
and  "went  his  whole  pile"  in  order  to  secure  these 
two  objects,  and  he  was  successful.  He  was  chosen 


552  INSIDE   LIFE   IN   WALL    STKEET. 

President  of  both  companies;  he  made  an  alliance 
with  the  Union  Pacific  Railroad  Company  which  ac- 
crued to  the  advantage  of  his  own  line ;  he  succeeded 
in  securing  a  large  subsidy  from  Congress ;  he  pro- 
cured the  passage  of  a  law  by  the  legislature  of  New 
York  which  enabled  the  Pacific  Mail  Company  to 
speculate  in  their  own  stock ;  he  had  the  treasury  of 
the  Panama  Railroad  Company  to  resort  to  for  loans 
on  an  emergency;  the  wealth  of  the  Howe  Sewing 
company,  an  immense  concern,  was  at  his  back. 

The  effect  of  these  various  movements  upon  Panama 
showed  itself  by  the  rise  in  the  stock  of  that  company 
from  50  to  146. 

The  price  of  Pacific  Mail  stock  rose  more  slowly. 
Some  hidden  obstacle  seemed  to  block  its  upward  path. 
It  appears  that  one  of  the  directors  was  a  prominent 
member  of  the  Jay  Gould  and  Henry  N.  Smith  clique ; 
the  same  individual  was  also  one  of  Stockwell's  brok- 
ers. Whenever  an  order  was  given  by  Stockwell  with 
a  view  to  the  manipulation  of  the  price  in  either  direc- 
tion, its  execution  failed  to  accomplish  the  object  in- 
tended, because  Gould  and  Smith  nullified  it  by  some 
contrary  movement  for  their  own  purposes.  Stock- 
well,  as  soon  as  he  discovered  the  cause  of  failure  of 
these  moves,  dismissed  the  broker  and  ultimately  de- 
feated him  in  the  next  annual  election  of  directors. 

From  the  moment  when  this  discovery  was  made, 
the  Stockwell  interest  and  the  Gould-Smith  interest 
were  arrayed  against  each  other.  Each  party  tried  to 
outwit  the  other.  The  Stockwell  faction  were  bulls 
and  the  rival  faction  bears,  and  as  Stockwell  had  the 
inside  track  he  worsted  his  antagonists.  While  Smith 
was  heavily  short  of  the  stock  his  rival  jumped  it 


UNCLE   DANIEL   SQUEEZING   THE   BOYS.  553 

swiftly  up  from  65  to  87  ;  Smith  took  a  loss  of  nearly 
$500,000  on  the  short  side,  and  then  buying  at  high 
prices  for  a  rise,  the  stock  broke  18  per  cent.  Once 
more  Smith  took  his  loss  and  went  short  of  it  again 
for  a  steady  pull  downwards. 

Both  Smith  and  Gould  believed  at  this  time  that  the 
true  policy  was  to  sell  stocks  for  a  decline ;  to  this  end 
they  had  invested  largely  in  gold,  by  means  of  which 
they  expected  to  control  currency  sufficiently  to  create 
a  stringency  in  the  market  and  help  stocks  downward. 
But  the  strong  movement  in  Pacific  Mail  gave  a  gen- 
eral upward  tendency  to  the  market.  The  heats  of 
of  the  summer  were  come,  and  Smith's  magnificent 
steam  yacht  was  fired  up  for  a  cruise,  but  Captain 
Smith  was  detained  ashore  by  his  embarrassing  posi- 
tion on  the  market. 

One  shrewd  old  eye  had  been  watching  Smith  and 
Gould  in  their  incomings  and  outgoings,  and  observed 
that  among  other  stocks  on  the  list,  they  had  sold  Erie 
largely  for  future  delivery.  Daniel  Drew  (for  his  was 
the  eye  aforesaid)  knew  well  that  of  the  780,000 
shares  of  the  capital  stock  of  Erie,  700,000  shares 
were  held  abroad.  He  took  occasion  about  this  time 
to  buy  a  few  thousand  shares  of  the  stock  remaining 
in  the  American  market,  in  which  purchase  he  was 
aided  and  abetted  by  certain  German  bankers,  who 
were  in  a  position  to  know  a  thing  or  two  about  Erie. 

Presently  the  stock  became  scarce  for  delivery,  and 
Smith  and  Gould  were  obliged  to  resort  to  their  Old 
Uncle  Daniel  in  order  to  borrow  the  stock,  for  which 
they  were  obliged  to  pay  an  exorbitant  commission. 
Daniel  was  of  course  reluctant  to  extort  these  com- 
missions from  his  old  associates,  but  he  felt  it  to  be  a 


554  INSIDE   LIFE   IN   WALL    STREET. 

duty  to  himself  and  family  from  which  he  should  not 
shrink.  "I've  known  Jay  and  Henry,"  said  the  old 
man  to  his  broker  in  a  deprecating  manner,  "  goin'  on 
seven  year ;  they  is  good  boys  j  don't  charge  'em  three 
per  cent  a  day,  charge  'em  one  and  a  half,  they'll  give 
down  freer  then  and  more'n  that  they'll  feel  better." 
Smith  and  Gould  soon  found  that  they  must  make  terms 
with  their  old  uncle,  which  they  shortly  after  succeeded 
in  doing  at  a  severe  loss. 

What  the  end  of  the  contest  with  Stockwell  would 
have  been  it  is  hard  to  say ;  but  something  occurred 
at  this  juncture  equally  sudden  and  unforseen;  Jay 
Gould  after  strenuously,  but  in  vain,  urging  Smith  to 
change  their  policy  and  cover  their  contracts  at  a  loss, 
at  length  cut  loose  from  his  old  associate  and  joined 
the  ranks  of  the  Stockwellites  and  the  Vanderbilt  men. 
From  this  point  of  time  it  was  war  to  the  knife  be- 
tween Smith  and  Gould. 

The  former  was  reported  to  be  short  of  Pacific  Mail 
to  the  extent  of  fifty  thousand  shares,  one  fourth  part 
of  the  whole  capital  stock  of  the  company.  He  clung 
to  his  position  with  a  tenacity  that  seemed  under  the 
circumstances  like  an  infatuation. 

Gould  and  Stockwell  joined  hands  in  bulling  Pacific 
Mail,  and  one  fine  day  in  August,  under  the  skilful 
manipulation  of  William  Heath  £  Co.,  the  pool  brokers, 
the  stock  was  seen  to  pass  103  in  its  upward  course. 

Smith  again  was  forced  to  come  to  terms.  His  net 
losses  on  this  transaction  were  half  a  million,  and 
Stockwell's  star  was  in  the  ascendant ;  two  years  be- 
fore he  had  been  addressed  as  plain  Mister  Stockwell ; 
he  was  now  given  a  title,  he  was  called  Commodore 
Stockwell. 


CHAPTER    XXXVII. 

THE  NORTHWESTERN  CORNER— THE  SHYLOCK 
ERA  AND  THE  FALL  OF  STOCKWELL. 

The  Three  Leaders  of  the  Northwest  Movement,  Gould,  Clarke,  and 
Schell — Arranging  Preliminaries — Averting  a  T1  leatened  Danger — 
Entrapping  Drew  and  Smith — Writhing  in  the  Trap — A  Desperate 
Measure — The  Arrest  of  Gould — Jumping  the  Price  100  pur  cent,  in 
an  Hour— Losses  of  Drew  and  Smith — A  Gigantic  Operation  in  Erie — 
How  Gould  Made  $4,000,000— Vanderbilt  and  Gould  Watching  the 
Market— The  Shy  lock  Abroad— Selling  Money — Stockwell  in  a  Tight 
Place— A  Crash  in  Pacific  Mail,  and  Stockwell  "  Goes  Up." 

E  rise  of  Pacific  Mail  was  the  most  brilliant 
pool  movement  since  the  year  1869,  when 
$3  New  York  Central  was  lifted  by  the  strong 
*  hands  of  Vanderbilt  and  his  followers  from 
135  to  218.  It  was  soon  overshadowed,  however,  by 
another  gigantic  operation,  which  was  unparalleled 
by  any  similar  movement  since  the  Prairie  du  Chien 
corner  in  1865. 

We  allude  to  the  corner  in  Chicago  and  North- 
western. The  secret  history  of  this  wonderful  rise 
will,  perhaps,  never  be  written,  for  it  is  known  only 
to  the  leaders  who  engineered  it. 

The  three  men  who  achieved  the  startling  result 
were  Horace  T.  Clarke,  Augustus  Schell,  and  Jay 
Gould.  Clarke,  whom  we  have  before  alluded  to, 


556  INSIDE   LIFE   IN  WALL   STREET. 

was  a  lawyer  and  prominent  railroad  man.  Augustus 
Schell  had  also  in  former  years  been  a  leading  lawyer 
and  politician,  and  was  for  many  years  chairman  of 
the  National  Democratic  Committee.  Both  were  able 
men,  experienced  financiers,  and  possessed  of  great 
wealth,  chiefly  acquired  in  the  Vanderbilt  movements. 

Several  months  were  consumed  in  1872  in  buying 
the  common  stock,  which  had  been  slowly  rising, 
under  this  absorption.  One  great  danger  threatened 
the  success  of  the  movement,  and  that  was  the  possi- 
bility that  the  directors  of  the  company  would  issue  a 
batch  of  convertible  bonds,  and,  exchanging  them  for 
stock,  load  down  the  ring  with  this  new  stock  at  high 
prices.  In  fact  some  of  the  directors  were  heavily 
short  of  the  stock,  believing  that  it  was  much  higher 
than  it  was  worth.  This  circumstance  became  known 
in  the  street,  and  several  of  the  largest  operators  had 
followed  their  example,  believing  that  the  directors 
knew  what  they  were  about.  Henry  N.  Smith  was 
said  to  have  sold  short  40,000  shares.  Daniel  Drew 
nearly  as  much  more.  John  L.  Tracy,  the  President 
of  the  Company,  was  also  on  the  short  side,  and  a 
host  of  smaller  operators  followed  the  example  of 
these  leaders. 

The  pool  had  by  the  first  of  October  bought  the 
whole  capital  stock,  $11,000,000,  either  for  cash  or  in 
the  form  of  "calls"  and  contracts.  The  directors 
suspecting  the  danger  they  were  in,  met  and  author- 
ized the  issue  of  $11,000,000  of  convertible  bonds; 
the  pool  took  the  whole  issue  off  the  hands  of  the 
company;  Tracy  covered  his  shorts,  and  joined  the 
trio  in  pushing  the  stock  upwards;  for  a  few  weeks 
the  price  stood  firm,  at  from  80  to  85 ;  but  early  in 


THE  NORTHWESTERN  CORNER.         557 

November,  while  the  eyes  of  the  " street"  were  daily 
watching  the  long  vibrations  of  Pacific  Mail,  suddenly 
Northwest  bounded  up  to  par,  dropped  back  to  90, 
and  then  rushed  to  105. 

Smith  and  Drew  both  knew  that  they  were  trapped ; 
the  latter  had  already  relieved  himself  by  borrowing 
10,000  shares  of  Mrs.  Keep,  widow  of  the  late  Henry 
Keep,  and  filling  his  contracts  to  that  extent;  Smith, 
unable  to  make  bis  deliveries,  bought  largely  of  the  pre- 
ferred stock  of  the  same  company,  and  tendered  it  in  lieu 
of  the  common  stock,  but  the  tender  was  refused.  He 
had  one  last  card  to  play — a  desperate  measure,  but  one 
that  he  hoped  would  bring  Gould  to  terms ;  he  was  cog- 
nizant of  certain  old  transactions  in  Erie  which  would 
enable  the  Erie  Company  to  demand  of  Gould  an  im- 
mense sum, — about  $6,000,000.  He  disclosed  these 
matters  to  the  President  of  the  Erie  Railway  Company ; 
a  warrant-  was  issued  for  Gould's  arrest,  and  this 
operator  was  taken  by  the  sheriff  soon  after  the  price 
had  risen  above  par,  as  already  mentioned.  Clarke 
and  Schell  promptly  gave  bail,  and  Gould  was  soon 
back  in  the  street,  burning  for  revenge.  Meanwhile, 
and  during  his  temporary  absence,  the  stock  rose  like 
lightning  to  200,  and  all  who  were  responsible  to 
deliver  saw  themselves  in  the  abyss  of  ruin.  The 
next  day  it  rose  to  230.  The  smaller  tribe  of  bears 
were  let  off  at  from  150  to  160.  Drew  and  Smith 
alone  were  denied  any  compromise.  But  at  last  they 
were  allowed  to  settle  at  a  considerable  discount  from 
the  summit  price ;  still  the  losses  of  both  were  enor- 
mous— millions  would  not  have  covered  them.  The 
price  then  sank  back  to  75,  and  the  pool  were  still 

holders  of  most  of  the  capital  stock,  their  situation 
34 


558  INSIDE   LIFE   IN   WALL   STEEET. 

under  the  burden  being  somewhat  relieved  by  the 
large  sums  paid  them  by  the  bears  in  order  to  be  let 
off  from  their  contracts. 

The  sequel  to  the  arrest  of  Jay  Gould  was  an 
extraordinary  one. 

It  was  believed  that  a  hard  fight  would  be  made  by 
Jay  Gould  over  the  Erie  claim,  on  account  of  which, 
at  the  instance  of  H,  N.  Smith,  he  had  been  subjected 
to  arrest.  But  very  much  to  the  astonishment  of 
everybody  he  promptly  made  restitution  to  the  Erie 
Railway  to  the  amount  of  $6,000,000,  excusing  him- 
self from  personal  liability  in  the  matter  by  the  plea 
that  he  was  merely  holding  the  property  of  the  com- 
pany in  trust,  and  had  always  been  ready  to  surrender 
it  upon  demand.  To  this  plea  some  color  of  reason 
was  given  by  the  fact  that  a  considerable  number  of 
the  legal  instruments  under  which  he  held  the  prop- 
erty expressed  upon  their  face  that  he  held  it  in 
trust. 

Before  making  this  restitution,  he  bought  200,000 
shares  of  Erie  in  the  neighborhood  of  50 ;  the  price 
soon  rose  to  69 ;  a  dividend  of  one  per  cent,  was 
declared,  and  Gould,  under  the  firmness  of  the  price 
thus  created,  succeeded  in  disposing  of  his  200,000 
shares,  and  selling  short  100,000  shares  more  for  a 
turn  on  the  other  side. 

These  vast  operations  which  we  have  just*  described 
gave  a  new  activity  to  the  market,  and  the  public 
were  drawn  into  the  vortex  of  speculation  by  the 
thousand.  An  interval  of  some  weeks  passed  away, 
and  everything  was  quiet  on  the  American  bourse. 
The  pools  were  inactive ;  the  outside  battalions  were 
lying  on  their  arms ;  after  the  fever  of  the  past  three 


GOULD   MAKING   RESTITUTION.  559 

months  Wall  street  in  December,  1872,  needed  rest. 
But  every  speculator  felt  than  when  the  battle  once 
more  commenced  it  would  be  a  conflict  such  as  Wall 
street  had  never  known. 

Cornelius  Vanderbilt  had  been  watching  the  course 
of  speculation  for  a  twelvemonth,  more  as  a  spectator 
than  an  actor  in  the  stirring  drama.  He  was  quietly 
laying  his  plans  to  accomplish  two  objects:  he  was 
aiming  first  to  get  complete  control  of  the  Western 
Union  Telegraph  Company,  and  second,  to  make  the 
New  York  Central  and  Hudson  River  Railroad  the 
greatest  freight  line  in  the  country.  He  had  suc- 
ceeded in  negotiating  a  loan  of  $40,000,000,  and  was 
proceeding  to  lay  two  new  tracks,  over  which  he 
expected  to  carry  more  freight  than  any  other  two 
railways  combined.  The  price  of  New  York  Central 
had  risen  slowly  to  106,  pending  his  application  to  the 
legislature  to  grant  him  more  ample  powers  in  order 
to  put  through  his  two  new  tracks.  Points  were 
freely  communicated  as  to  the  price  that  the  stock 
would  sell  for  in  the  course  of  six  months.  John 
Morrissey,  the  pugilist-speculator,  formed  a  pool  on 
his  own  account,  based  on  "  puts,"  which  he  had  sold 
to  a  large  amount,  and  125  was  to  be  the  figure  which 
the  price  would  touch. 

The  Western  Union  stock,  under  similar  influences, 
was  enormously  dealt  in,  and  rose  in  January  to  94. 
Extravagant  stories  were  told  of  the  immense  divi- 
dends that  would  be  paid  wThen  this  stock  should  pass 
into  the  Commodore's  hands.  The  stock  was  a  com- 
plete foot-ball,  being  tossed  up  and  thrown  down 
daily  under  operations  which  showed  the  whole 
capital  stock  changing  hands  in  a  single  week. 


560  INSIDE   LIFE   IN   WALL    STREET. 

The  leading  speculators  of  the  street  all  dealt  in 
Western  Union,  and  the  prospect  of  its  being  one  of 
the  -so-called  Vanderbilt  stocks  was  conceded  to  be 
sure. 

Pacific  Mail,  like  Western  Union,  even  during  the 
dull  season,  was  freely  bought  and  sold.  Its  daily 
fluctuations  were  sufficient  to  make  or  mar  the  for- 
tunes of  any  large  operator  that  dealt  in  it. 

But  its  tendency  ever  since  it  struck  103,  amid  the 
plaudits  of  the  Stock  Exchange,  had  been  downward. 
Every  tune  it  fell  ten  per  cent,  it  would  be  seized  and 
tossed  firmly  up  seven  or  eight,  wiping  out  a  score  or 
two  of  luckless  bears  in  its  course.  Stockwell  looked 
haggard ;  Jay  Gould  had  slipped  out  of  the  stock  at 
high  prices,  and  he  was  fighting  the  battle  alone.  He 
expected  to  be  able  to  sell  every  dollar  he  held  at 
from  90  to  100,  but  instead  of  seizing  the  golden 
moment,  when  all  in  the  market  were  crazy  to  buy 
Pacific  Mail,  he  actually  bought  at  par  of  the  company 
27,000  shares  of  its  own  stock,  which  it  held.  Again, 
when  the  price  was  80-85,  he  relieved  H.  N.  Smith 
of  50,000  shares,  which  he  was  carrying  under  special 
contract  for  the  benefit  of  the  pool.  He  sold  large 
numbers  of  "  puts,"  hoping  that  they  would  be  used 
to  buy  stock  against,  and  thus  his  load  would  be 
lightened.  Still  the  price  sank,  and  in  January  it  had 
reached  70. 

Even  under  these  adverse  circumstances  Stockwell 
might  have  carried  himself  through  but  for  the  unpre- 
cedented and  long-continued  stringency  in  the  money 
market  during  the  winter  and  spring  of  1873.  What 
the  causes  were  for  this  stringency  has  been  often 
inquired.  The  causes  were  various.  The  volume  of 


STOCKWELL   IN  A   TIGHT  PLACE.  561 

business  done  throughout  the  country  was  enormous, 
and  as  values  had  greatly  risen  since  1861  the  amount 
of  currency  required  to  transact  business  was  corres- 
pondingly great.  Merchants  and  manufacturers  had 
overtraded,  habits  of  luxury  and  extravagance  were 
everywhere  prevalent ;  the  cautious  and  conservative 
were  sounding  the  alarm,  and  capital,  with  its  usual 
timidity,  was  calling  hi  its  reserves.  Of  course  as  soon 
as  money  commands  a  high  rate  of  interest,  men  are 
apt  to  hoard  it,  either  for  the  usurious  interest  which 
it  will  command,  or  through  fear  of  a  financial  crash. 
Another  cause  of  the  oft-recurring  and  continued 
stringency  of  money  is  the  fact  that  men  carry  from 
five  to  ten  times  as  much  money  about  their  persons 
as  they  were  in  the  habit  of  doing  hi  former  years. 
Let  two  millions  of  men  and  women  carry  hi  their 
pockets  from  five  to  fifty  dollars  each,  one  can  readily 
calculate  what  a  vast  sum  is  thus  locked  out  of 
circulation. 

Whatever  the  great  cause  of  this  money  stringency 
was  that  prevailed  in  the  winter  of  1873,  the  effect 
of  the  stringency  was  patent.  It  was  clear  to  the  eye 
of  even  the  average  operator  that  no  great  rise  could 
take  place  as  long  as  money  continued  to  command 
such  rates.  Yet,  so  confident  were  many  persons  that 
it  would  soon  relax,  that  they  clung  to  their  holdings, 
submitting  to  the  shaves  which  they  were  forced  to 

pay- 

The  wealthy  operators  who  held  large  blocks  of 
stocks  pledged  them  to  foreign  bankers  for  exchange, 
which  they  sold,  and  thus  supplied  themselves  with 
money  at  lower  rates.  Money  came  from  Canada 
and  the  interior  in  large  sums  to  be  loaned  out  in 


562  INSIDE   LIFE   IN  WALL   STKEET. 

Wall  street,  yet  such  was  the  demand  for  money  by 
the  bankers,  brokers,  and  money  men  in  that  locality, 
that  these  sums  were  speedily  absorbed,  and  more  was 
clamored  for. 

The  daily  rate  ranged  from  one-sixteenth  to  half 
per  cent,  a  day;  sometimes  it  was  loaned  at  three- 
fourths,  and  for  one  day  at  one  per  cent.,  or  365  per 
cent,  per  annum.  A  crowd  of  well-dressed  beggars 
met  every  afternoon  on  the  corner  of  Exchange  Place 
and  Broad  street,  and  bought  money  as  they  would 
stocks  and  gold,  of  the  rich  Shylocks  who  resorted 
thither.  That  locality  was  the  "  Rialto,"  or  rather 
the  "Bridge  of  Sighs,"  where  our  American  and 
German  Jews  levied  toll  on  their  less  fortunate 
brothers. 

When  spring  came,  an  immense  number  of  small 
dealers  had  consumed  their  margins  in  paying  these 
large  commissions  for  the  use  of  money  to  carry 
stocks  which,  if  they  did  not  depreciate,  at  least  did 
not  go  up.  Frank  Baker,  a  noted  operator,  of  whom 
mention  has  been  made  in  one  of  our  former  chapters, 
is  said  to  have  been  actually  killed  by  inches  on 
account  of  the  immense  sums  which  he  was  obliged 
to  pay  for  having  his  stocks  carried  through  the 
pinch. 

Vanderbilt,  though  he  affected  to  deride  the  condi- 
tion of  the  money  market,  was  discomposed  by  the 
unrelaxed  stringency  which  pressed  so  heavily  upon 
the  stocks  held  by  his  friends  and  associates,  who 
were  expected  to  lift  the  prices  of  his  favorites. 

Jay  Gould  passed  the  winter  up  town,  without 
setting  foot  in  Wall  street  for  three  months  after  the 
first  of  January.  Though  apparently  doing  little,  he 


365  PER  CENT.  PER  ANNUM.          563 

was  watching  the  progress  of  matters  with  a  sharp 
eye.  The  little  giant  who  had  taken  in  other  times 
$100,000,000  of  burden  on  his  shoulders  spent  his 
days  now  at  his  residence  on  the  corner  of  Fifth 
Avenue  and  Forty-seventh  street.  In  his  private 
apartment  in  the  basement  he  sat  with  his  ear  and 
his  eye  both  turned  towards  the  market.  By  means 
of  one  telegraph  he  received  the  daily  prices  of  stocks 
and  gold;  by  means  of  another  he  could  send  mes- 
sages to  Osborne  and  Chapin,  his  brokers  in  "Wall 
street,  or  to  London.  He  told  his  friends  at  the 
Manhattan  Club  that  his  motto  now  was,  "  Let  well 
enough  alone." 

Notwithstanding  his  seeming  indifference,  his  stake 
in  the  market  was  by  no  means  a  light  one ;  he  was 
heavily  short  of  Western  Union,  he  had  a  large  block 
of  Northwest  stock,  and  of  Hannibal  and  St.  Joe ;  he 
was  also  buying  large  amounts  of  gold,  and  selling 
short  the  Vanderbilt  stocks  on  every  spurt,  and  he 
had  a  finger  in  the  Pacific  Mail  pie.  Besides  this  he 
was  President  of  the  Northern  New  Jersey,  and  of 
the  Southern  New  Jersey  Railroad  Companies,  and 
was  poring  over  "  Poor's  Railroad  Manual "  in  search 
of  some  other  good  railroad  to  link  on  to  those  he 
then  held. 

The  signs  of  the  times  looked  to  him  ominous  of 
some  great  change  in  the  market  shortly,  and  he  was 
casting  about  for  some  plan  by  which  he  could  profit 
by  that  change. 

Let  us  now  return  to  Stockwell  and  his  vanishing 
bank  account. 

In  February  it  became  known  to  some  of  his  asso- 
ciates that  Pacific  Mail  was  a  dead  weight  on  his 


564  INSIDE   LIFE   IN   WALL   STREET. 

hands.  The  money  market  had  prevented  him  from 
working  off  his  load ;  although  he  had  met  his  engage- 
ments thus  far,  and  his  weakness  was  concealed  from 
the  public  eye,  it  was  plain  to  the  insiders  that  his 
contracts  yet  to  mature  would  carry  him  down.  The 
suspense  under  which  he  had  labored  for  six  weeks 
was  broken  when  Pacific  Mail  lurched,  a  few  days 
later,  down  to  60.  Notwithstanding  he  had  failed  to 
accomplish  his  object,  and  had  lost  by  that  failure 
$2,000,000  or  more,  he  struggled  manfully  with 
disaster,  borrowed  money  whenever  he  could  get  it, 
among  other  sums  half  a  million  from  Jay  Gould  on 
the  pledge  of  100,000  shares  at  50,  and  settled  up  his 
heavy  indebtedness  to  the  company  by  mortgaging 
the  Howe  Sewing  Machine  Company  for  $1,100,000, 
his  efforts  were  vain.  The  stock  again  broke  away, 
and  fell  to  51 ;  it  rallied  to  61 ;  again  it  broke  to  45. 
Another  party  were  working  to  secure  a  majority  of 
stock  against  the  May  election ;  he  clung  tenaciously 
to  his  position,  for  if  he  could  retain  the  presidency 
of  the  company  he  might  retrieve  his  fortune..  The 
election  took  place  on  the  19th  of  May,  but  Stock- 
well's  name  was  not  among  those  of  the  directors 
chosen  that  day.  "Years  ago,"  remarked  he  to  a 
friend,  "people  used  to  call  me  Mister  Stockwell; 
soon  after  I  came  into  the  street  they  used  to  call  me 
Captain  Stockwell ;  last  Summer  they  called  me  Com- 
modore Stockwell ;  now  they  call  me  that  red-headed 
cuss  from  Cleveland."  Sic  transit  gloria  mundi. 


CHAPTEK  XXXVIH 

GOULD   VERSUS   YANDERBILT— THE  SHADOW  OF 
PANIC. 

The  Bear  leader  and  the  Bull  leader  face  to  face — The  Vanderbilt  rail- 
way programme — His  lieutenants  and  brokers — The  position  of  Jay 
Gould — His  agents  in  the  street — Arguments  in  favor  of  a  probable 
depreciation  of  stocks — Watering  railway  stocks — A  sum  in  arithme- 
tic— Why  the  money  market  was  easy  in  the  summer  of  1873 — The 
Government  Syndicate — Too  many  new  railways — The  Pacific  Mail 
movement — The  Great  Gold  Pool — The  deepening  distrust  of  cap- 
italists.— The  Gold  break — A  gathering  storm. 

?HE  season  of  stringent  money,  after  lasting 
four  months  and  paralyzing  the  stock  specu- 
lation, fairly  closed  in  May,  1873. 

The  public  were  astonished  to  find  that  no 
panic  had  occurred,  and  once  more,  as  money  was 
freely  offered  at  from  five  to  six  per  cent,  on  call  ex- 
pectation was  awakened  of  a  stirring  summer  cam- 
paign. 

Two  opposing  parties  were  arrayed  against  each 
other  in  the  market.  One  was  headed  by  Cornelius 
Vanderbilt.  His  policy  was  one  which  pointed  to  the 
aggrandizement  of  himself  and  his  favorites,  by  build- 
ing up  a  railway  system  which  he  should  control  in 
such  a  way  that  dividends  should  be  large  and  uni- 
formly paid.  He  was  thus  in  favor  of  an  apprecia- 
tion of  railway  values.  Many  circumstances  had 


566  INSIDE  LIFE  IN   WALL   STREET. 

favored  him  in  carrying  out  this  policy.  The  vast 
volume  of  currency  had  stimulated  the  freight  and 
passenger  business  of  the  railways  which  he  managed; 
the  growing  population  and  the  enlarging  commer- 
cial interests  of  the  country  were  constantly  working 
to  enhance  the  intrinsic  value  of  railway  stocks.  In 
fact,  time  was  working  for  Cornelius  Vanderbilt. 

He  had  also  old-established  lines  under  his  control. 
This  was  a  great  point  in  his  favor,  and  arrangements, 
as  we  have  already  said,  were  being  made  which  would 
render  the  Vanderbilt  lines  the  great  freight  railways 
of  the  country. 

The  tremendous  money  pressure  in  the  winter  and 
spring  of  1873,  produced  scarcely  any  effect  upon  the 
so-called  Vanderbilt  Stocks.  Lake  Shore,  in  the  teeth 
of  a  high  rate  of  interest,  ran  up  from  90  to  97  in 
March  and  in  the  preceding  January,  Western  Union 
had  risen  10  per  cent.,  when  money  was  worth  one- 
eighth  per  cent,  daily  upon  the  street;  during  the 
same  period  New  York  Central  and  Hudson  had  made 
three  or  four  sharp  leaps,  with  subsequent  gradual  set- 
tlings down,  which  showed  how  firmly  it  was  held, 
while  Harlem,  as  if  to  bid  defiance  to  the  money  pres- 
sure, rose  swiftly  fifteen  per  cent. 

Besides  the  able  lieutenants  who  fought  under  the 
commodore's  banner,  and  of  whom  mention  has  been 
already  made,  he  employed  an  army  of  skilful  brokers 
and  manipulators  to  execute  his  orders — among  others, 
the  firms  of  George  Bird  Grinnell  &  Co.,  Frank  Work 
&  Co.,  George  Osgood  &  Co.,  Richard  Schell,  and  other 
nimble  and  case-hardened  veterans  in  the  ranks  of 
speculation. 

The  Vanderbilt  party  had  fortified  themselves  in 


TANDERBILT  VERSUS    GOULD.  567 

advance  by  time  loans,  negotiated  with  foreign  bank- 
ers, and  the  more  youthful  and  enthusiastic  members 
of  that  party  averred  that  no  money  pressure  that 
could  possibly  occur  could  break  down  the  prices  of 
their  favorite  stocks.  When  the  spring  came,  this 
boast  seemed  to  have  been  justified  by  the  position  of 
the  stocks  in  question. 

Thus  stood  Cornelius  Vanderbilt  in  the  spring  and 
summer  of  1873,  an  octogenarian  in  years,  but  as  full 
of  pride  and  strength  of  will  and  love  of  power  and 
prestige  as  twenty  years  before  when  he  was  fighting 
his  rival  sea-kings  over  the  lines,  between  New  York 
and  the  Pacific  coast. 

The  other  party  of  which  we  have  spoken  was 
headed  by  Jay  Gould.  Recuperated  in  bodily  ener- 
gies by  a  season  of  comparative  inaction  during  the 
winter,  he  made  his  appearance  in  the  street  in  April, 
and  organized  his  forces  for  a  campaign  which  was  to 
be  memorable  in  the  annals  of  Wall  Street. 

He  had  been  in  1872  a  special  partner  in  three  sep- 
arate commission  houses ;  in  the  latter  part  of  that 
year,  in  consequence  of  his  quarrel  with  H.  N.  Smith, 
he  had  retired  from  the  firm  of  Smith,  Gould,  Martin  & 
Co.,  and  thereafter  he  made  his  principal  headquarters 
at  the  office  of  Osborne  &  Chapin,  of  which  house  he 
was  a  special  partner. 

Charles  J.  Osborne,  or  Charley  Osborne,  as  his  friends 
call  him,  the  senior  partner  of  the  firm  of  Osborne  & 
Chapin,  is  a  dashing  operator  of  the  James  Fisk,  Jr. 
pattern,  full  of  bonhommie  and  generosity,  and  with 
a  great  flow  of  animal  spirits,  but  with  a  solid  sub- 
stratum of  shrewd  business  qualities  and  experience 
on  the  street. 


568  INSIDE  LIFE  IN  WALL   STREET. 

Wm.  Heath  &  Co.  are,  among  others,  favorite  brokers 
of  Gould.  The  senior  member  of  this  noted  firm, 
we  have  already  described ;  the  junior  member,  Chas. 
E.  Quincey,  who  attends  to  the  office  business,  is  a 
young  man  of  fine  executive  talents ;  he  represents 
also  the  suavibr  in  modo  as  Wm.  Heath  does  thefortir 
ter  in  re  of  the  concern. 

Gould  commenced  operations  in  April,  by  feeling 
of  Pacific  Mail.  His  plan  was  to  have  a  voice  in  the 
new  board  of  directors  which  was  to  be  chosen  in 
May,  and  in  furtherance  of  an  ulterior  plan  in  respect 
to  that  stock,  Charles  J.  Osborne,  his  partner,  was 
elected  to  represent  Gould  in  the  board. 

Pacific  Mail  was  in  a  bad  way ;  shortly  after  the 
new  board  had  taken  their  seats,  the  stock-price  fell 
to  35 ;  the  most  damaging  reports  were  made  respect- 
ing the  company's  finances,  and  instead  of  approach- 
ing dividends,  as  had  been  foretold  the  year  before,  it 
was  in  the  market  for  a  loan  of  $500,000  in  order  to 
meet  pressing  claims  against  it.  Gould  was  said  to 
be  heavily  short  of  the  stock. 

Meanwhile  a  strong  party  took  hold  of  the  stock ; 
Kufus  Hatch,  H.  G.  Stebbins,  Russell  Sage,  and  other 
shrewd  and  wealthy  capitalists,  deemed  the  price  too 
low,  and  so  they  pushed  it  up  to  45.  The  prospect 
was  that  Gould  would  be  unable  to  cover  his  shorts, 
except  at  a  loss,  but  he  maintained  his  position  in 
spite  of  this  unfavorable  prospect. 

He  was  a  bear  in  many  other  stocks  on  the  list, 
notably  of  Western  Union,  Lake  Shore,  and  New 
York  Central ;  in  fact  of  nearly  every  other  active 
stock  dealt  in  at  the  Broker's  Board  •  he  distributed 
his  sales  in  such  a  way  that  he  could  be  badly  hurt 


THE   WATERING   PROCESS.  569 

only  by  a  general  rise,  and  of  a  general  rise  he  had 
no  fears. 

After  a  long  and  careful  study  of  the  financial 
situation,  he  had  arrived  at  the  conclusion  that  within 
a  few  months  a  very  considerable  depreciation  in 
values  would  take  place,  enabling  him  to  buy  in  all 
the  stocks  he  had  sold,  at  an  immense  profit. 

He  viewed  the  stock  speculation  as  a  huge  balloon, 
which  had  been  industriously  inflated  for  many  years, 
and  the  time  was  now  come  for  it  to  collapse. 

The  practice  of  watering  stocks,  which  has  been  so 
extensively  in  vogue  for  ten  years  past,  will  be  best 
illustrated  by  the  following  table  of  the  leading  rail- 
ways whose  stocks  are  dealt  in  at  the  Brokers  Board, 
showing  the  amount  of  their  capital  stock  hi  1860, 
and  the  amount  in  1873,  after  going  through  the 
watering  process : — 

I860.  1873. 

Erie, $11,000,000  78,000,000 

Reading, 11,737,041  31,566,575 

New  York  Central  and  Hudson,  -     27,858,466  89,428,330 

Fort  Wayne, 6,266,278  19,714,286 

Rock  Island, 5,603,000  19,000,000 

Pennsylvania  Central,          ...     13,249,125  41,339,475 

Lake  Shore  and  Southern,  -        -     16,000,000  50,000,000 

It  is  true  the  properties  of  these  lines  have  greatly 
appreciated,  but  not  to  anything  like  the  extent  as 
represented  by  the  increased  capital. 

Let  us  take  the  Erie  Railway  and  make  a  propor- 
tion, and  then  multiply  the  extremes  and  means 
together,  in  order  to  obtain  an  equation — thus : 

11  (the  stock  in  '60) :  5  (the  earnings  in  '60) : :  78 
(the  stock  in  73) :  is  to  18  (the  earning  in  '73.)  Our 
equation  stands,  198=390.  And  as  the  price  in  1860 


570  INSIDE   LIFE   IN   WALL   STREET. 

was  10-15,  the  price  in  1873  should  be  5-7| — i.e., 
about  one-tenth  of  what  it  was  actually  selling  for  in 
the  summer  of  1873.  Of  course  we  do  not  take  into 
our  calculation  some  favoring  circumstances  which 
would  materially  modify  our  statement,  still  it  was 
easy  to  see  that  60-65  was  a  high  price  for  Erie.  The 
same  reasoning  applied,  though  not  as  unfavorably,  to 
other  stocks  on  the  list.  It  was  argued  by  the  stock 
inflationists  that  the  watering  of  the  stock  of  the 
New  York  Central  was  done  for  the  purpose  of  giving 
the  stockholders,  in  the  form  of  the  new  stock,  the 
increased  value  of  the  railroad,  its  real  estate,  its  fran- 
chises, &c.,  and  that  a  dividend  could  be  paid  upon 
the  old  and  new  stock.  The  fact  that  such  a  dividend 
was  subsequently  paid  was  used  as  an  argument  to 
justify  similar  watering  processes  in  the  case  of  other 
railway  stocks. 

The  condition  of  the  money  market  was  another 
powerful  argument  in  favor  of  a  depreciation  in 
values. 

Some  of  the  causes  of  the  singular  stringency  in 
money  which  prevailed  in  the  winter  of  1873  have 
been  already  stated.  The  same  causes  were  operat- 
ing to  produce  a  renewal  of  the  stringency.  The 
ease  in  money  which  existed  in  Wall  street  was  local 
in  its  extent,  and  factitious  in  its  nature.  Outside  of 
Wall  street  in  mercantile  and  manufacturing  circles 
all  over  the  country,  money  still  continued  to  com- 
mand high  rates,  or  was  difficult  to  be  obtained  at  the 
usual  rate. 

When  we  say  the  ease  in  money  in  Wall  street  was 
factitious  we  mean  that  it  was  made  so  for  a  purpose. 
The  Government  at  Washington  wished  to  call  in 


AN   EASY   MONEY   MARKET.  571 

the  five-twenties,  and  substitute  bonds  at  a  lower  rate 
of  interest.  In  order  to  float  this  new  class  of  bonds, 
it  would  be  necessary  to  have  an  easier  money  market 
than  had  prevailed  during  the  winter;  the  treasury 
officials  accordingly  did  all  in  their  power  to  effect 
this  object;  semi-official  assurances  were  given  to  the 
leading  capitalists  that  in  any  emergency  the  Secretary 
of  the  Treasury  would  reissue  the  whole  or  part  of 
the  $44,000,000  of  the  greenbacks  retired  by 
Secretary  McCulloch. 

The  friends  of  the  Administration  were  largely 
engaged  in  banking,  and  deeply  embarked  in  the 
building  of  new  railroads.  The  clique  of  bankers 
known  as  the  syndicate  were  greatly  interested  in 
having  the  loan  taken.  The  semi-official  assurances 
were  accordingly  relied  upon,  and  it  was  confidently 
expected  that  the  $44,000,000  would  be  reissued  in 
case  of  any  renewed  pressure. 

Under  these  expectations  the  speculative  rings  of 
all  classes  went  on  boldly  with  their  several  enter- 
prises ;  the  bull  cliques  of  the  stock  market  took  firmer 
hold  of  their  railway  shares,  and  those  houses  wrhich 
had  undertaken  to  build  new  railways  urged  on  these 
schemes  w^ith  fresh  energy.  The  country  was  passing 
through  an  era  of  railway  building  such  as  it  had 
never  before  known ;  the  successful  completion  of  the 
Union  Pacific  Eailroad  had  stimulated  other  similar 
gigantic  enterprises  which  were  undertaken  by  the 
wealthiest  private  banking  houses,  and  the  country 
was  flooded  with  the  prospectuses  of  these  new  com- 
panies, setting  forth  in  glowing  terms  the  advantages 
which  would  accrue  to  all  who  took  the  opportunity 
then  offered  of  investing  in  the  bonds  issued  by  the 


572  INSIDE   LIFE   IN  WALL   STREET. 

companies,  and  these  bonds  were  readily  disposed  of 
to  the  amount  of  several  hundred  of  millions. 

Watered  stocks,  railway  enterprises  engaged  in 
beyond  the  needs  of  the  country,  and  a  factitious  and 
local  ease  in  money  which  would  stimulate  speculation 
for  the  time  being,'  all  these  circumstances  were 
arguments  to  Gould's  mind  in  favor  of  a  financial 
crash  soon  to  come. 

Early  in  the  preceding  winter,  and  while  gold  was 
selling  at  the  lowest  figure  of  the  season,  he  had 
bought  largely  of  the  precious  metal,  and  supple- 
mented those  purchases  all  the  spring  and  summer, 
until  by  common  rumor  he  was  credited  with  holding 
all  the  floating  gold  in  the  market,  besides  large 
amounts  in  the  form  of  calls  and  private  options. 
The  plan  was  to  use  gold  to  absorb  currency,  and 
produce  a  fall  in  stocks,  besides  working  gold  to  a 
higher  figure ;  thus  he  hoped  to  make  money  either 
by  the  rise  of  gold  or  the  fall  of  stocks,  or  by  both 
these  ways. 

He  was  somewhat  disconcerted  in  his  programme 
by  the  rise  in  the  Vanderbilt  stocks,  which  took  place 
in  July. 

The  sudden  death,  in  June,  of  Horace  F.  Clark,  left 
vacant  the  Presidency  of  the  Lake  Shore  Railroad 
Company;  shortly  afterwards  Cornelius  Vanderbilt 
was  elected  president  in  place  of  his  late  son-in-law, 
and  this  seems  to  have  been  judged  a  favorable 
occasion  to  push  up  the  Vanderbilt  stocks.  Accord- 
ingly Lake  Shore  soon  rose  to  99  (including  the 
dividend),  Western  Union  to  93£,  and  Harlem,  on  the 
strength  of  the  new  loan  by  New  York  Central, 
to  1341. 


A   GATHERING    STORM.  573 

Gould  was,  however,  soon  relieved  from  the  fear  of 
being  cornered,  by  the  prices  of  the  stocks  above 
named  gradually  subsiding,  and  speculation  in  the 
general  list  dying  away. 

This  was  in  August.  The  signs  were  growing 
ominous  of  some  great  change.  During  all  the 
summer  it  was  easy  to  be  seen  by  every  close 
observer  that  a  cloud  hung  over  the  financial  sky. 
With  the  cautious  and  conservative,  retrenchment 
and  economy  had  been  practised.  Capitalists  were 
loathe  to  embark  in  new  enterprises.  A  deep-seated 
distrust  prevailed  of  the  manner  in  which  railroads 
had  been  built  and  managed  since  the  close  of  the 
War.  The  investigations  and  litigation  respecting 
the  inside  management  of  the  railways  which  had 
been  conducted  in  Congress,  in  the  State  Legislatures, 
and  the  courts,  had  been  freely  ventilated  by  the 
press,  and  had  produced  at  last  their  legitimate  effect 
upon  the  public  mind.  Suspicions  were  everywhere 
entertained  that  the  rottenness  uncovered  by  the 
Credit  Mobilier  investigation  existed  in  many  other 
companies,  and  might  be  brought  to  light  in  such  a 
way  as  to  affect  very  seriously  railway  values. 

The  course  of  gold  during  the  summer  was  watched 
with  interest  and  apprehension.  It  was  publicly 
known  that  one  daring  speculator,  who  had  been  the 
chief  organizer  of  the  prodigious  gold  corner  which 
culminated  in  Black  Friday,  was  now  in  actual  pos- 
session of  nearly  every  dollar  of  the  floating  gold 
outside  of  the  Treasury  of  the  United  States,  and  that 
he  stood  ready  to  buy  all  the  gold  in  the  country  in 
order  to  complete  his  scheme.  Stories  respecting  the 
weak  position  of  the  Federal  Treasury  were  circulated 

and  believed. 

35 


574  INSIDE   LIFE   IN   WALL    STREET. 

v 

Throughout  the  summer  months  Gould's  name  was 
daily  mentioned  by  the  press  as  connected  with  the 
great  movements  in  stock  and  gold  on  the  American 
bourse.  He  had  the  reputation  of  being  able  to 
command,  on  short  notice,  more  money  than  any 
other  man  in  the  street.  His  operations  had  been 
so  vast  in  their  conception,  and  so  complete  in  their 
issue,  that  he  loomed  up  as  the  king  of  the  market, 
and  seemed  to  hold  the  destinies  of  Wall  street  in  his 
hands. 

The  bull  party,  in  spite  of  the  distrust  prevailing 
in  many  quarters,  still  argued  that  they  could  go 
through  the  expected  stringency  without  difficulty, 
and  pointed  to  the  largely  increased  earnings  of  most 
of  the  railroads  to  justify  them  in  the  tenacity  with 
which  they  clung  to  their  shares.  Prices  were  gen- 
erally strong  through  the  first  days  of  September, 
money  was  reasonably  easy,  and  many  had  fortified 
themselves  with  time  loans.  If  clouds  were  visible 
they  did  not  wholly  cover  the  sun,  and  so  the  specu- 
lative holders  of  stocks  disported  themselves  in  its 
beams,  like  summer  flies,  and  paid  little  heed  to  the 
deepening  shadow  of  the  approaching  tornado. 


CHAPTER    XXXIX. 
THE    GREAT    PANIC    OF    1873. 

Jay  Gould  Tilts  His  Golden  Hammer — An  Auriferous  Avalanche — Fail- 
ure of  Kenyon,  Cox  &  Co.,  and  Daniel  Drew — "  Too  Much  New  Rail- 
road " — The  Panic  Mongers  at  Work — Suspension  of  Jay  Cooke  &  Co. 
—Account  of  the  Operations  of  the  Firm— Effect  of  the  Failure- 
Prices  "  drop "  like  Lead  in  a  Vaccuum — Spirit  of  Panic  Eampant — 
Scenes  at  the  Fifth  Avenue  Hotel— Another  Black  Friday— Failure  of 
Fiske  &  Hatch,  and  Twenty  Other  Firms— Collapse  of  the  Trust  Com- 
panies—Closing of  the  Stock  Exchange — Consultation  Between 
President  Grant  and  the  Capitalists — Vanderbilt  Under  the  Harrow — 
Jay  Gould's  Position — Just  Missing  Another  $5,000,000. 

JAY  GOULD  stands  only  five  feet  four  in  his  stock- 
ings; in  the  language  of  his  friends  and  satellites, 
"  he  is  little,  but  oh,  dear  !  "  When  his  interest  lies 
on  the  short  side  of  the  market  he  can  smite  down 
the  top  figures  as  if  he  wielded  a  hammer  as  pond- 
erous as  that  tilted  by  the  Hercules  of  Scandinavian 
mythology.  Thus  stood  the  little  giant  in  the  vesti- 
bule of  the  Sto<jk  Exchange  on  the  1st  of  September, 
'73,  poising  in  mid  air  $30,000,000  of  gold,  waiting 
to  hurl  it  on  the  market  when  the  efficient  causes 
and  agents  of  panic  had  commenced  their  work  in 
earnest. 

The  5th  of  September  came ;  soon  after  ten  in  the 
morning  a  din  arose  in  the  gold  room,  which  swelled 
into  an  uproar.  Gold  changed  hands  by  the  score  of 


676  INSIDE   LIFE   IN   WALL    STKEET. 

millions  in  a  score  of  minutes.  By  three  o'clock  the 
price  had  fallen  to  114i  ;  $200,000,000  of  gold  had 
been  bought  and  sold,  and  the  gold  bank  groaned 
under  the  enormous  clearanpes.  - 

The  whole  street  had  been  mystified  by  the  mani- 
pulations of  the  gold  men;  it  was  a  problem  of  the 
knottiest  description  as  to  what  Gould  would  do  with 
the  huge  pile  of  gold  he  had  hoarded  up,  whether  he 
would  send  it  up  "  kiting,"  or  use  it  merely  to  "milk" 
the  street  with,  or  lock  up  currency  by  means  of  his 
holdings.  This  problem  was  now  being  solved;  he 
was  selling  his  gold.  Saturday,  Monday  and  Tuesday 
these  immense  transactions  were  repeated  in  the  gold 
room,  and  on  Wednesday  the  price  was  111,  and 
Gould  had  no  more  gold  to  sell.  His  losses  on  this 
operation  were  magnified  by  common  rumor  to  one 
million  and  a  half  of  dollars.  The  break  was  believed 
at  first  by  the  more  ardent  bulls  to  be  tantamount  to 
a  failure  of  Gould's  scheme  to  depress  stocks.  The 
Vanderbilt  party  chuckled  over  the  disaster,  and  pre- 
dicted the  speedy  ruin  of  the  "weird  little  man." 
Now  they  boasted  that  "  the  commodore  would  soon 
crush  his  antagonist  and  squeeze  him  dry." 

The  fallacy  of  these  expectations  was  soon  exposed ; 
indeed  not  only  was  Gould's  power  still  unbroken, 
but  it  became  a  question  whether  he  Jjad  lost  a  dollar 
on  the  average  of  his  gold  account. 

His  plans  were  now  revealed ;  he  was  using  his 
funds  which  had  been  locked  up  in  gold  to  depress 
stocks ;  the  associated  banks  were  commencing  to  feel 
the  autumnal  drain,  and  showed  that  week  a  depletion  of 
$5,000,000  from  their  weekly  deposits.  A  concerted 
attack  was  now  commenced  by  Gould  and  his  agents  on 


HIDDEN   ROTTENNESS.  577 

the  whole  line  of  stocks ;  the  little  man  was  conceded 
to  know  more  about  the  inside  conditon  of  financial 
affairs  than  any  other  operator  in  the  street ;  he  knew 
that  there  was  other  hidden  rottenness  besides  that 
so  recently  uncovered  by  the  failure  of  the  Brooklyn 
Trust  Company,  and  the  New  York  Warehouse  and 
Security  Company,  and  he  now  used  this  knowledge 
vigorously  and  effectually  in  carrying  out  his  plans. 

As  early  as  the  10th  of  September  the  fancies,  like 
Hannibal  and  St.  Joe,  Toledo  and  Wabash,  and  North- 
west had  fallen  off  several  points,  while  Canton  and 
Quicksilver,  by  a  fall  of  fifteen  and  ten  per  cent, 
respectively,  showed  that  the  leading  operator  in  these 
two  stocks  was  in  trouble;  this  operator  was  none 
other  than  our  old  friend  Daniel  Drew. 

The  firm  of  Kenyon,  Cox  &  Co.,  in  which  he  was 
a  special  partner,  had  undertaken  to  carry  through 
the  Canada  Southern  Railroad,  and  this  firm  and 
Daniel  Drew  were  on  the  paper  of  that  railroad  line 
to  the  extent  of  one  and  a  half  millions  or  thereabout. 
Just  at  this  point  of  time  the  paper  of  that  railroad 
company  went  to  protest,  and  the  old  respectable 
house  of  Kenyon,  Cox  &  Co.,  and  Daniel  Drew  him- 
self, were  obliged  to  suspend;  hence  it  was  that 
Canton  and  Quicksilver,  in  which  Drew  was  heavily 
interested,  declined  so  sharply  at  the  outset  as  already 
mentioned.  The  old  speculator  was  almost  heart- 
broken by  his  losses ;  he  retired  to  his  residence  and 
took  to  his  bed,  in  which  position  he  received  his 
friends,  who  called  to  condole  with  him.  "  I  know  it 
aint  right,"  the  old  man  would  say,  "  that  I  should  be 
a  lyin'  here ;  I  know  I  hadn't  ought  to,  but  it's  my 
way,  it's  my  way." 


578  INSIDE    LIFE   IN   WALL    STREET. 

Other  railroads  about  this  time  were  reported  to  be 
in  trouble.  Among  others,  the  St.  Joseph  and  Denver 
City,  and  the  Oswego  and  Midland  Companies,  both 
of  them  important  enterprises,  involving  a  large 
amount  of  capital.  These  reports  were  soon  confirmed ; 
another  slight  break  in  prices  on  the  bourse  followed, 
and  soon  Rock  Island  made  a  strange  retrograde 
movement  to  par ;  a  significant  movement,  for  Rock 
Island  was  counted  one  of  the  soundest  stocks  on  the 
list.  This  was  on  the  17th  of  September.  We  are 
now  approaching  as  if  by  a  series  of  rather  steep 
terraces,  the  brink  of  the  precipice. 

For  ten  days  the  panic  mongers  had  been  busy; 
birds  of  ill  omen  flitted  over  the  market  croaking  dis- 
aster. Notwithstanding  the  gathering  blackness  of 
the  tornado,  the  great  holders  of  stocks  kept  their 
position  in  a  very  intrepid  manner;  they  had  gone 
through  many  storms,  and  why  not  this  ?  Up  to  the 
morning  of  the  18th  the  prices  of  New  York  Central 
and  Lake  Shore  had  scarcely  budged,  and  Western 
Union,  mercurial  as  it  is,  only  yielded  three  per  cent. 
Excepting  Kenyon,  Cox  &  Co.,  and  the  famous  old 
speculative  director,  no  considerable  house  had  yet  suc- 
cumbed to  the  pressure. 

Early  on  the  morning  of  the  18th,  there  was  a  stir 
among  the  Vanderbilt  men  which  portended  some- 
thing either  better  or  worse.  The  whole  street 
buzzed  with  rumors  that  were  no  longer  whispered, 
but  spoken  aloud,  as  if  with  absolute  confidence  in 
their  truth ;  by  eleven  o'clock  they  swelled  in  volume, 
and  grew  more  portentous.  Prices  opened  weak  and 
tottering.  Western  Union  was  sagging  below  87, 
when  one  of  Jay  Gould's  satellites  threw  5,,000  shares 


FAILUKE    OF   JAY    COOKE   &   CO.  579 

upon  the  market ;  the  price  broke  then,  and  in  an 
hour  it  had  dropped  ten  per  cent.,  with  sales  of  ninety 
thousand  shares.  The  story  that  Jay  Cooke  &  Co. 
were  in  trouble  was  heard  in  the  street  at  ten  o'clock ; 
at  noon  the  president  of  the  Stock  Exchange  made 
the  official  announcement  of  their  failure.  The  sig- 
nificance of  this  failure  was  at  once  perceived ;  it  was 
another  failure  growing  out  of  the  financial  difficulties 
of  new  railroads.  The  Brooklyn  Trust  Company  had 
become  involved  in  consequence  of  advances  made  to 
the  Air  Line  Railroad  of  Connecticut ;  the  New  York 
Warehouse  and  Security  Loan  Company  owed  its  fail- 
ure to  advances  made  to  the  Missouri,  Kansas  and  Texas 
Railroad  Company ;  Kenyon,  Cox  &  Co.  and  Daniel 
Drew  owed  their  failure  to  advances  made  to  the 
Canada  Southern  Railroad  Company;  other  firms 
were  in  deep  water  in  consequence  of  entanglements 
with  the  Oswego  &  Midland  Railroad  Company;  all 
who  were  known  to  be  connected  with  new  railroad 
enterprises  were  now  under  suspicion. 

The  house  of  Jay  Cooke  &  Co.  stood  at  the  head 
of  the  great  banking  firms  which  had  arisen  since  the 
commencement  of  the  greenback  era.  In  consequence 
of  its  connection  with  the  negotiation  of  the  5-20 
loan,  and  the  Northern  Pacific  Railroad  Company,  its 
reputation  had  become  national ;  its  supposed  wealth 
was  enormous,  and  its  financial  relations  to  the  bank 
system  and  to  the  Federal  Government  were  of  an 
intimate  nature.  The  confidence  of  the  public  in  the 
strength  of  this  firm  had  never  hitherto  been  shaken, 
and  the  failure  of  no  banking  house  could  have  pro- 
duced such  an  effect  as  that  of  the  firm  of  Jay  Cooke 
&  Co.  By  one  o'clock  the  news  had  spread  like  wild 


580  INSIDE   LIFE   IN   WALL    STKEET. 

fire,  and  the  sidewalks  on  Wall  street,  Nassau  and 
Broad  streets  were  thronged  with  a  mixed  assemblage 
of  people.  What  the  immediate  cause  of  their  failure 
was  soon  became  generally  known.  A  run  had  been 
for  some  days  going  on  by  some  of  their  largest 
depositors,  who  needed  the  money  so  deposited  for 
their  own  business;  runs  on  banks  are  among  the 
contagious  financial  epidemics;  a  run  upon  other 
private  bankers  was  at  this  moment  going  on  in  a 
quiet  way  though  for  large  sums ;  the  firms  of  Fiske 
&  Hatch,  Henry  Clewes  &  Co.,  and  Howes  &  Macy 
were  being  now  drained  of  their  resources  by  their 
largest  depositors.  These  houses  still  stood  firm,  but 
among  the  brokerage  houses  Richard  Schell,  one  of 
the  prominent  Vanderbilt  operators,  and  the  respect- 
able firm  of  Robinson,  Suydam  &  Co.  had  succumbed. 

The  panic  which  was  started  in  the  morning  in- 
creased as  the  day  went  on,  and  in  spite  of  sharp 
rallies  prices  closed  at  nearly  their  lowest  point. 

Night  brought  time  for  reflection,  but  reflection  was 
calculated  to  point  to  a  worse  rather  than  a  better 
•condition  of  affairs  on  the  morrow.  One  fact  in  sta- 
tistics opened  the  eyes  of  capitalists  to  the  enormous 
railway  extensions  which  had  been  made.  As  many 
miles  of  railway  had  been  built  in  the  last  five  years 
as  all  the  miles  of  railway  in  the  country  in  1858. 
The  predictions  of  a  great  panic,  made  years  ago,  but 
never  hitherto  fulfilled,  flashed  across  the  minds  of 
capitalists.  The  time  for  the  fulfilment  of  these  pre- 
dictions was  now  ripe. 

The  spacious  halls  of  the  Fifth  Avenue  Hotel  were 
thronged  with  anxious  faces  that  night,  though  hope 
had  not  yet  died  in  the  hearts  of  many. 


WHOLESALE    SUSPENSION.  581 

The  night  trains  which  were  due  in  New  York  Fri- 
day morning  were  loaded  with  passengers  who,  on 
news  of  the  break  in  stocks  had  come  down  to  look 
after  their  margins,  or  buy  stocks  at  the  lower  prices. 
The  streets  around  the  Stock  Exchange  were  filled 
with  a  vast  crowd  of  people.  It  was  believed  by 
many  that  inasmuch  as  the  Vanderbilt  railway  shares 
had  as  yet  fallen  but  little,  that  they  would  be  ex- 
empted from  the  effects  of  the  panic,  in  spite  of  the 
want  of  confidence,  and  the  exorbitant  money  rate  (300 
per  cent  per  annum)  of  the  day  before.  But  this  ex- 
pectation was  baseless,  for  the  moment  the  Stock  Ex- 
change was  opened  it  was  seen  that  the  feeling  of  the 
day  before  had  deepened  in  intensity.  Prices  dropped 
like  lead  in  a  vacuum ;  in  ten  minutes  Harlem  fell  thirty 
per  cent.,  and  the  other  Vanderbilt  stocks  shrunk  and 
shrivelled  before  the  blast.  To  sell  at  any  price  only 
to  sell  was  the  watchword  of  the  hour. 

The  suspension  of  Fisk  &  Hatch  was  announced  in 
the  Board  at  eleven  o'clock.  A  feeble  hysterical  yell 
followed  the  announcement.  Every  few  moments  the 
ivory  gavel  of  the  president  fell  for  the  purpose  of  an- 
nouncing some  fresh  failure.  The  Stock  Exchange 
was  like  a  steam-boiler  shop,  where  a  hundred  workmen 
are  hammering  in  rivets.  Prices  lurched  downwards 
under  sales  which  aggregated  nearly  half  a  million 
shares.  Before  the  gong  sounded  that  afternoon, 
proclaiming  that  business  was  over,  twenty  firms  had 
suspended  which  forty-eight  hours  before  were  deemed 
to  be  perfectly  staunch. 

The  house  of  Fiske  &  Hatch  shared  with  Jay  Cooke 
&  Go.  and  Henry  Clewes  &  Co.  the  credit  of  having 
negotiated  the  5-20  loan  in  1863,  and  had  just  carried 


582  IXSIDE   LIFE   IN   WALL    STREET. 

through  another  great  railroad  enterprise,  viz.,  the 
Chesapeake  and  Ohio  Eailroad  Company  ;  but  the 
drain  upon  their  resources  by  their  heavy  depositors 
at  last  compelled  them  to  close  their  doors. 

Outside  of  Wall  and  Broad  streets  runs  were  being 
made  on  the  National  Trust  Co.  and  the  Union  Trust 
Co.  This  latter  was  esteemed  one  of  the  strongest 
institutions  of  the  kind  in  the  country  and  numbered 
among  its  stockholders  and  directors  many  enormously 
wealthy  persons,  among  others  Jas.  H.  Banker, 
Augustus  Schell  and  other  noted  Vanderbilt  R.  R. 
men.  It  went  through  the  day  safely. 

In  the  afternoon  the  panic  abated  not  a  jot  in  its 
force.  The  money  pressure  was  cruel.  Greenbacks 
were  worth  two  per  cent,  a  day  on  'Change  and  stocks 
were  turned  at  5  per  cent,  a  day,  i.  e.,  1825  per  cent, 
per  annum.  A  driving  rain  came  up  after  mid-day 
and  the  crowd  were  driven  into  the  door-ways,  where 
they  clustered  like  swarms  of  bees,  angrily  buzzing. 
One  old  man,  carrying  a  large  cotton  umbrella,  and 
supported  on  either  side  by  a  man  servant,  was  seen 
tottering  over  the  slippery  pavement.  It  was  Daniel 
Drew,  whom  the  bad  news  had  driven  from  his  couch 
in  order  that  he  might  look  after  his  interests  in  the 
street. 

In  the  evening  a  dense  crowd,  sullen,  or  fierce,  or 
hysterical,  filled  the  whole  lower  rooms  of  the  Fifth 
Avenue  Hotel.  Nearly  every  broker  and  active  oper- 
ator in  stocks,  besides  hundreds  of  merchants  and 
capitalists  were  there.  No  loud  conversation  was 
heard.  It  seemed  more  like  a  funeral  assemblage 
than  a  business  gathering.  On  Friday  the  shrinkage 
in  stocks  dealt  in  at  the  New  York  Stock  Exchange 


SCENES  DUK1NG  THE  PANIC  OF  1873. 


DISASTROUS    SHRINKAGE   IN   STOCKS.  585 

had  reached  $100,000,000.  The  shrinkage  on  bonds 
was  $50,000,000  more.  What  would  happen  on  the. 
morrow  was  a  question  which  the  stock  dealers  almost 
feared  to  ask  themselves. 

On  Saturday  morning,  the  20th  of  September,  a 
series  of  new  disasters  only  added  fuel  to  the  excite- 
ment. The  Union  Trust  Company,  the  National  Trust 
Company,  the  Bank  of  the  Commonwealth,  and  twelve 
more  respectable  brokerage  firms  suspended.  The  panic 
in  stocks  was  again  renewed  and  prices  kept  tumbling 
away  as  if  stocks  were  of  no  more  value  than  waste 
paper.  Western  Union  had  fallen  nearly  forty  per 
cent  in  four  days.  The  suspension  of  the  Union  Trust 
Company  was  partly  due  to  a  failure  of  the  Lake 
Shore  R.  R.  Company  to  pay  it  the  sum  of  $1,750,000 
which  it  owed.  This  fact  unsettled  the  other  Van- 
derbilt  railway  shares. 

Things  had  now  come  to  such  a  pass  in  the  Stock 
Exchange  that  deliveries  could  no  longer  be  made. 
The  greatest  difficulty  had  been  experienced  on  Fri- 
day in  procuring  the  certification  of  checks.  The 
entire  machinery  of  speculation  is  kept  in  motion  by 
certified  checks,  and  now  the  banks  refused  to  certify 
checks,  unless  the  money  or  its  equivalent  was  in 
bank.  At  noon  the  doors  of  the  Stock  Exchange 
were  closed  till  further  notice.  This  was  a  measure  of 
relief.  If  the  Stock  Exchange  had  continued  to  do 
business  scarcely  a  house  in  the  street  could  have  kept 
up.  Settlements  in  regard  to  stock  transactions  could 
now  be  made  privately,  and  further  suspensions 
staved  off  for  the  present. 

Other  measures  of  relief  were  taken.  The  associ- 
ated banks  authorized  the  issue  of  $10,000,000  of 


586  INSIDE   LIFE   IN   WALL    STREET. 

loan  certificates,  to  be  used  in  the  clearing  house,  in 
lieu  of  legal  tenders.  The  Government  announced 
that  it  would  purchase  bonds  with  its  surplus  cur- 
rency. Would  it  issue  the  whole  or  part  of  its  $44,- 
000,000,  to  relieve  the  wants  of  the  community  ? 
Telegram  after  telegram  was  sent  to  the  Secretary  of 
the  Treasury  imploring  him  to  give  relief  by  issuing 
the  $44,000,000.  On  Saturday  President  Grant  and 
Secretary  Richardson  came  on  to  New  York,  and  estab- 
lished their  head-quarters  at  the  Fifth  Avenue.  All  day 
Sunday  the  hotel  was  crowded  with  great  capitalists,  who 
all  besought  the  President  to  issue  the  $44,000,000. 
Commodore  Vanderbilt  was  sent  for  by  the  President 
and  offered  at  the  interview  that  followed  to  advance 
ten  millions  to  the  banks,  if  the  government  would  ad- 
vance $20,000,000.  Other  well-known  capitalists  ad- 
vocated the  purchase  by  the  Government  of  $10,000,- 
000  of  exchange,  which  could  be  bought  at  low  rates. 
The  legal  learning  and  ability  of  Reverdy  Johnson 
was  enlisted  on  behalf  of  the  capitalists,  and  the  Presi- 
dent was  advised  that  in  a  crisis  like  that  which  then 
existed  all  ordinary  rules  and  laws  should  be  sus- 
pended. The  President  refused  to  adopt  any  meas- 
ures like  those  suggested,  and  at  nine  o'clock  that 
evening  returned  to  Washington. 

During  the  three  days  ending  on  Saturday  the  20th, 
much  remark  and  inquiry  had  been  made  respecting 
the  position  of  the  two  great  stock  operators  Vander- 
bilt and  Gould.  The  former  remained  up  town 
Thursday  and  Friday,  the  18th  and  19th,  receiving 
constant  reports  of  the  progress  of  the  panic,  and 
manifesting  much  suppressed  nervousness  at  the  enor- 
mous shrinkage  which  was  taking  place  in  the  stocks 


'GEN.  GRANT  AND  THE  CAPITALISTS.      587 

which  he  so  largely  held.  On  Saturday  he  was  in 
close  consultation  with  the  officers  of  the  Union  Trust 
Company.  On  Monday,  after  his  interview  with 
President  Grant,  he  laid  out  a  new  programme,  having 
for  its  object  the  resuscitation  of  the  prices  of  the 
stocks  he  held.  This  programme  included  the  bor- 
rowing a  large  amount  from  foreign  bankers,  on  the 
pledge  of  New  York  Central. 

With  the  money  thus  obtained  he  purposed  buying 
large  blocks  of  Lake  Shore  and  Western  Union.  But 
the  general  suspension  of  the  banks  on  Monday,  and 
the  condition  of  the  money  and  exchange  market, 
forced  him  to  postpone  the  execution  of  this  plan. 
He  accordingly  commenced  making  a  searching  inves- 
tigation into  the  Union  Trust  Company.  The  failure 
of  this  company  had  given  the  finishing  blow  to  public 
confidence.  Its  trusts  were  very  large  and  extensive. 
Hardly  a  State  in  the  Union  but  was  affected  by  its 
failure.  The  executors  of  estates,  the  trustees  of  widows 
and  orphans,  and  fiduciary  officers,  all  over  the  Union 
had  selected  it  as  the  depository  of  Trust  funds.  The 
defalcation  of  Carleton  to  the  company,  to  the  amount 
of  $300,000,  had  shown  a  rottenness  in  one  depart- 
ment, 'and  it  was  feared  that  some  more  wide-spread 
defalcation  might  be  disclosed. 

The  whole  Vanderbilt  party  were  disorganized  by 
the  disasters  of  the  preceding  week.  Millionaires  of 
ten  days  before  now  saw  their  fortunes  dwindle  to  a 
few  thousands,  and  still  the  Commodore  and  his 
wealthy  followers  clung  desperately  to  their  holdings 
and  strove  to  hold  up  the  shattered  market. 

Jay  Gould  for  months  had  been  fighting  his  battle 
almost  alone.  He  had  agents  to  transact  his  enor- 


588  INSIDE   LIFE   IN    WALL    STREET. 

mous  business  it  is  true,  but  he  had  no  partners  in  the 
great  game  he  was  playing.  He  kept  his  own  coun- 
sel, and  issued  orders,  the  secondary  results  of  which 
none  but  himself  could  foretell.  On  the  17th  of  Sep- 
tember he  stood  ready  to  snatch  millions  out  of  the 
abyss  into  which  prices  were  soon  to  be  precipitated. 
What  the  aggregate  of  his  short  contracts  was  upon 
that  day  no  one  but  he  and  his  brokers  can  tell,  but 
we  think  they  may  be  estimated  at  more  than  two 
hundred  thousand  shares.  Every  ten  per  cent,  in  the 
fall  of  prices  on  that  estimate  would  have  shown  him 
a  profit  of  $2,000,000.  Indeed  some  who  pretended 
to  know  about  his  position,  predicted  that  an  average 
panic  would  net  him  $5,000,000. 

On  Thursday,  the  18th  of  September,  he  com- 
menced buying  in  his  shorts,  after  prices  had  run 
down  an  average  ten  per  cent.  On  Friday,  the  19th, 
he  continued  his  purchases,  buying  enormously^  for 
cash,  which  he  could  do  at  a  difference  of  five  per 
cent,  in  his  favor  over  purchases  deliverable  on  the 
following  day. 

The  offices  of  his  several  brokers  were  clogged  with 
these  enormous  deliveries.  It  was  only  with  the 
utmost  difficulty  that  certified  checks  could  be  ob- 
tained, and  some  of  the  firms  to  which  these  stocks 
Were  to  be  returned  in  fulfilment  of  his  contracts, 
were  failing  or  in  trouble.  On  Saturday  the  20th, 
when  the  doors  of  the  Stock  Exchange  were  closed, 
his  brokers  were  still  loaded  down  with  stocks,  which 
they  had  bought  or  borrowed,  and  were  forced  to 
carry  them  over  Sunday. 

Thus  Gould  had  involuntarily  become  a  bull.  He 
was  obliged  to  carry  large  blocks  of  stocks,  through 


GOULD  COMES  THROUGH  SAFE.        589 

inability  of  the  brokers  to  receive  them.  His  agents 
worked  like  giants  to  effect  settlements  with  his  debt- 
ors, and  within  four  days  he  succeeded  in  clearing  a 
large  part  of  his  holdings.  Though  some  predicted 
that  the  impossibility  of  obtaining  money  would  com- 
pel him  to  default  in  his  engagements,  it  became  cer- 
tain by  Wednesday,  the  24th,  that  both  Gould  and 
Vanderbilt  would  go  through  the  crisis.  This  assur- 
ance tended  to  calm  the  minds  of  such  as  foresaw  the 
terrible  disasters  which  would  follow  the  failure  of  the 
two  leaders  of  the  market. 


CHAPTER    XL. 

THE  GREAT  PANIC  OF  1873— CONTINUED. 

The  hammer  ringing  on  the  anvil — Failure  of  Henry  Clews  &  Co.,  and  of 
Howes  &  Macy — Re-opening  of  the  stock  exchange — Grand  Rally  along 
the  whole  line  under  command  of  Vanderbilt — G.  B.  Grinnell  &  Co.  go 
(jown — Renewal  of  the  panic — Blocking  the  wheels  of  speculation — 
The  basis  of  the  Lake  Shore  Pool — Using  the  Bonds  of  the  company — 
The  house  of  the  Spragues  falls— Prostration  of  the  Stock  Market, 
and  general  paralysis  of  mercantile  business — Financial  .condition  of 
Europe — The  panic  in  London — Doing  business  on  margins — Estimate 
of  the  shrinkage  of  values — The  financial  overlook  for  1874. 

^  LL  day  Monday,  Sept.  22d,  the  crowd  surged 
sullenly  to  and  fro  before  the  closed  doors  of 
the  Stock  Exchange.  Tuesday,  opened  with 
brighter  views,  and  prices  were  slowly  working 
their  way  upwards  under  the  stimulus  of  considerable 
purchases  of  cash  stock  from  outside  speculators  and 
investors,  when  suddenly  about  eleven  o'clock  in  the 
forenoon  the  brightness  was. overcast  and  prices  weak- 
ened. The  cause  of  this  change  was  soon  apparent. 
Henry  Clews  &  Co.,  and  Howes  &  Macy,  two  strong 
houses  of  the  greenback,  five-twenty  bond  era,  had, 
after  a  manful  struggle,  gone  the  same  way  with  Jay 
Cooke  &  Co.,  and  Fiske  &  Hatch. 

The  panic  was  not  yet  over ;  that  was  plain.  Now 
every  ear  was  open  to  catch  the  news  from  the  banks 
and  the  merchants  in  the  provincial  cities  and  from 


RE-OPENING   OF   THE    STOCK   EXCHANGE.         591 

Europe.  Would  the  general  mercantile  and  manufac- 
turing business  of  the  country  be  able  to  go  through 
the  crisis?  Would  the  depression  in  American  securi- 
ties produce  a  panic  in  the  Old  World  which  would 
flood  the  New  York  market  with  the  hundreds  of  mil- 
lions of  bonds  and  railway  shares  held  in  the  European 
market  and  thus  drain  our  country  of  gold  ?  These 
were  the  serious  questions  of  the  hour. 

The  week  passed  slowly  by  without  any  new  disas- 
ters of  a  serious  nature.  For  a  few  days  the  panic 
mongers  held  tongues  as  if  dumb-founded,  at  the  vast- 
ness  of  the  ruin  they  had  helped  to  work,  while  gold, 
which  had  run  up  to  115.^,  suddenly  collapsed  and  slid 
back  to  110,  and  heavy  shipments  of  gold  were  being 
made  from  England  to  use  on  the  American  Bourse. 
It  was  a  singular  feature  of  the  great  panic  of  1873 
that  gold  should  fall  in  spite  of  the  influences  which 
were  operating  to  push  it  up. 

By  Saturday,  the  28th  of  September,  Jay  Gould  had 
cleared  the  immense  blocks  of  stocks  with  which  he 
had  been  saddled  the  preceding  week. 

On  the  last  day  of  September  the  Stock  Exchange 
was  re-opened.  For  one  hour  the  Brokers  Board  rang 
with  the  old  din  of  voices ;  then  the  crowd  dwindled 
and  the  din  subsided  to  a  dull  burr.  Confidence  was 
still  lacking.  But  no  disasters  followed  immediately  the 
renewal  of  business  and  this  was  something.  Within 
three  days  thereafter  the  prospect  brightened ;  "  the 
panic  is  vain !"  "  Vanderbilt  and  Gould  are  buying !" 
the  Banks  "  are  strong  and  will  stand  together !"  "  the 
merchants  are  all  right!"  "the  government  are  re- 
issuing the  $44.000,000 ;"  these  and  similar  remarks 
were  made  and  caught  up  and  reiterated.  The  gre- 


592  INSIDE    LIFE   IN   WALL    STREET. 

garious  herd  of  operators  all  moved  in  one  direction 
now,  and  each  operator  took  what  he  could  of  the  share 
list  and  rushed  pell  mell  up  the  hill  which  they  had  so 
recently  slid  down  in  such  precipitate  style.  The 
veteran  Commodore  having  borrowed  of  foreign  Bank- 
ers a  large  sum  on  the  pledge  of  New  York  Central 
led  the  van  of  this  movement,  and  Lake  Shore,  West- 
ern Union,  and  Harlem,  went  up  like  rockets  through 
the  darkness.  Two  more  days  like  those  of  the  first 
week  which  followed  the  re-opening  of  the  Stock  Ex- 
change, and  it  seemed  that  confidence  would  be  restored 
with  the  upward  course  of  prices. 

But  now  a  great  change  was  impending.  Prices 
once  more  tumultuously  hurried  downwards.  Rumor, 
which  had  been  still  for  a  week  now  towered  aloft  and 
wagged  a  thousand  envenomed  tongues.  The  Van- 
derbilt  stocks  had  been  the  citadel  around  which  the 
fullest  forces  of  the  market  had  rallied ;  this  citadel 
was  now  being  assaulted  and  its  foundation-props  un- 
dermined. 

The  firm  of  George  Bird  Grinnell  &  Co.,  were  per- 
haps the  leading  house  connected  with  the  Vanderbilt 
party,  as  brokers.  The  senior  member  of  the  firm  had 
been  before  the  late  war  a  dry  goods  merchant,  and 
had  come  into  Wall  street  soon  after  the  greenback 
speculation  commenced.  In  the  summer  of  1873  he 
was  reputed  to  be  worth  millions  of  dollars  which  he 
had  accumulated  by  taking  advantage  of  his  opportu- 
nities while  a  broker  for  the  Vanderbilt  ring.  When 
his  failure  was  announced  upon  the  8th  of  October  he 
was  known  to  be  carrying  enormous  blooks  of  stock 
for  his  customers,  especially  shares  of  the  Lake  Shore 
Kailroad  Company,  and  to  hold  nearly  all  the  stocks 


FAILURE    OF    G.    B.    GRINNELL.  593 

lately  owned  by  Horace  F.  Clarke  and  left  in  trust 
upon  his  decease.  Mr.  Grinnell  had  proved  that  he 
was  an  honorable  man  in  his  former  mercantile  trans- 
actions, and  there  were  no  frauds  or  irregularities 
hanging  about  his  skirts ;  he  simply  failed  from  the 
immense  depreciation  of  the  stocks  he  was  carrying 
for  his  customers. 

The  effect  of  this  failure  upon  the  market  was  in- 
stant and  powerful.  In  vain  did  Vanderbilt  and  his 
associates  endeavor  to  stem  the  tide ;  an  injunction 
was  procured  forbidding  the  firm  of  G.  B.  Grinnell  & 
Co.  from  parting  with  the  mass  of  securities  which  they 
held,  this  temporarily  arrested  the  panic  which  had 
began  to  spread ;  but  in  four  days  prices  broke  away, 
and  on  the  14th  and  15th  of  October  they  fell  lower 
than  even  on  the  fateful  20th  of  September  preceding. 
Proceedings  in  bankruptcy  were  being  taken  against 
the  Union  Trust  Co.,  Daniel  Drew,  Kenyon,  Cox  & 
Co.,  and  Geo.  B.  Grinnell  &  Co.  The  injunction 
against  the  firm  last  named  was  about  to  be  dissolved 
and  the  vast  bulk  of  the  securities  hold  by  them  threat- 
ened the  market  like  a  loosening  avalanche.  Tuesday 
and  Wednesday  of  that  week  were  black  days  in  the 
calendar  of  Wall  street,  the  house  of  Vanderbilt  seemed 
builded  on  the  sand,  and  the  rains  were  descending, 
and  the  floods  were  breaking  upon  it  to  its  fall. 

Once  again  the  great  ebb  tide  slackened  in  its  rush 
downwards,  and  turning  floated  off  the  stranded  market 
and  heaved  it  upward  for  a  space ;  once  again  brighter 
faces  were  seen  on  'change,  and  the  indomitable  pluck 
of  American  commercial  enterprise  sought  to  wrest 
fortune  out  of  disaster.  The  situation  was  bad  enough 
for  every  man  who  had  ventured  into  the  stock  mar- 


594  INSIDE   LIFE   IN   WALL    STREET. 

ket.  The  estate  of  Horace  F.  Clarke,  which  at  his 
death  had  been  estimated  at  from  four  to  five  millions, 
had  been  utterly  swept  away ;  those  of  the  other  Van- 
derbilt  lieutenants  were  scarcely  better,  and  even  bets 
were  taken  that  the  Commodore  himself  would  break. 

In  consequence  of  the  refusal  of  the  banks  to  certify 
checks  the  whole  machinery  of  speculation  had  been 
thrown  out  of  gear.  The  custom  of  certifying  checks 
is  founded  upon  confidence.  Suppose  a  firm  with  a 
capital  of  two  hundred  thousand  dollars  buys  and  sells 
ten  millions  of  stocks  in  a  single  day,  it  pays  for  these 
stocks  in  checks  which  the  banks  certify  under  the 
belief  that  before  banking  hours  are  over  the  firm  wall 
make  good  its  deposit  with  the  certified  checks  which 
itself  receives  from  the  parties  to  whom  these  stocks 
have  been  sold.  It  will  be  readily  seen  that  sometimes 
the  firm  will  have  overdrawn  its  account  to  the  amount 
of  millions,  and  consequently,  in  pan'.cky  times,  the  bank 
will  refuse  even  for  ten  minutes  to  allow  such  an  over- 
draft. Under  this  derangement  of  the  machinery  of 
speculation  even  Vanderbilt,  with  all  his  money  and 
determination,  will  not  suffice  alone  to  lift  a  demor- 
alized market.  Still,  prices  had  gradually  recovered 
after  the  15th  of  October. 

The  failure  of  the  Union  Trust  Company  was  in 
great  measure  due  to  the  fact  that  the  Lake  Shore 
Railroad  Company  owed  the  former  more  than  $1,- 
800,000  which  it  borrowed  without  collateral  security 
and  was  unable  to  pay ;  this  had  a  black  look,  as  the 
Lake  Shore  had  paid  a  dividend  three  months  before 
which  was  construed  to  have  been  paid  out  of  this  bor- 
rowed money;  on  Friday,  the  24th  of  October,  it  was 
discovered  that  two  and  one-quarter  millions  of  Lake 


BASIS    OF    LAKE    silORE    POOL.  595 

Shore  bonds  had  been  transferred  from  the  Union  Trust 
Company  to  Geo.  Bird  Grinnell  &  Co.,  and  used  for 
the  private  speculations  of  the  officers  of  the  Trust 
Company  and  the  Lake  Shore  Company.  The  Van- 
derbilt  storks  again  broke  and  rushed  downward,  and 
at  the  same  time  the  air  grew  dark  with  rumors  affect- 
ing the  solvency  of  great  mercantile  houses.  It  seemed 
as  if  this  was  the  finishing  stroke  to  the  faint  remnants 
of  confidence  upon  the  American  Bourse.  Prices 
slightly  reacted,  but  showed  a  feebleness  that  augured 
ill  for  the  condition  of  the  stock  market.  It  is  safe  to 
say  that  of  the  vast  multitude  of  provincial  operators 
scarcely  one  could  boast  that  he  had  derived  a  penny 
of  profit  during  the  sixty  days  then  last  past,  while  the 
rest  were  utterly  adrift  of  their  margins.  The  great 
operators  of  the  street  were  nearly  all  plunged  into 
bankruptcy,  or  had  retired  from  the  field  to  brood  over 
their  enormous  losses. 

The  genius  of  panic  as  if  unsatiated  by  the  destruc- 
tion it  had  wrought,  still  stalked  through  the  darkness 
seeking  for  new  victims. 

Up  to  the  8th  of  October  the  effects  of  the  financial 
crisis  were  circumscribed  within  comparatively  narrow 
limits.  Although  the  banks  of  New  York  had  lost 
sixty  millions  of  their  deposits  in  six  weeks  they  had 
sustained  each  other,  and,  with  one  exception  though 
in  a  state  of  suspension,  were  not  shown  to  be  actually 
insolvent.  The  mercantile  and  manufacturing  inter- 
ests of  the  country  had  generally  maintained  them- 
selves nobly.  But  it  became  apparent  in  the  last  days 
of  October  that  these  latter  interests  were  fast  becom- 
ing paralyzed.  Factory  after  factory  had  closed  its 
doors.  The  great  and  small  jobbing  houses  of  the 


696  INSIDE   LIFE   IN   WALL    STREET. 

larger  cities  were  utterly  unable  to  collect  their  dues 
from  the  country  dealers,  the  fall  in  the  prices  of  the 
principal  agricultural  products  of  the  West  deterred 
the  farmers  from  sending  their  crops  to  the  eastern 
markets.  The  railroads,  those  barometers  of  the  com- 
mercial activity  of  the  nation,  began  to  reflect  in  their 
diminished  earnings  the  general  paralysis  of  industry. 
The  great  manufacturers  and  merchants  were  like 
•some  tall  Indiaman  deep  laden  and  with  every  sail 
set  directly  in  the  path  of  a  storm ;  smaller  crafts  can 
hug  the  shore  but  the  tall  Indiaman  fares  ill  far  out  at 
sea  in  the  cyclone  of  the  tropics. 

One  of  those  figurative  Indiamen  was  the  great  man- 
ufacturing firm  of  the  Spragues,  of  Rhode  Island. 
•Young  men  as  they  were,  and  inheriting  a  vast  fortune, 
they  were  not  content ;  their  ambition  was  to  employ 
100,000  workmen  and  to  quadruple  their  alreat  y  co- 
lossal fortune.  Forests  in  Maine,  water  privileges  all 
over  the  Union,  were  theirs ;  iron  and  cotton  and 
woolen  and  timber  were  the  raw  material  which  fed 
their  forges  and  hammers  and  spindles  and  saws  'i  a 
half  a  score  of  States ;  if  it  had  been  prophesied  one 
month  before  the  29th  of  October,  1873,  th;  t  the 
Spragues  would  fail,  the  prophet  would  have  been 
hooted  out  of  the  market  place.  Rumors  affecting 
their  condition  had  been  circulated  on  the  24th  of 
October ;  though  contradicted,  these  rumors  gathered 
force  and  coherency  as  the  following  days  passed  away, 
and  on  the  29th  their  failure  was  conceded  by  those 
who  were  cognizant  of  their  true  condition,  and  became 
consummated  a  few  days  later.  The  suspension  of 
•their  New  York  commission  house  (Hoy%  Sprague  & 
Co.)  was  an  incident  in  the  fall  of  the  principal  firm  of 


FAILURE    OF   THE   SPRAGUES.  597 

A.  &  W.  Sprague.  The  credit  of  the  great  jobbing 
house  of  H.  B.  Claflin  &  Co.,  of  New  York,  was  now 
brought  in  question,  and  amid  the  deepest  gloom  the 
lowest  prices  yet  made  were  revealed  upon  the  black- 
boards of  the  Stock  Exchange. 

The  railway  list  was  now  an  inert  mass  which  dis- 
played little  more  than  a  galvanized  life.  The  great 
man-eating  sharks  of  Wall  street  seemed  to  have  been 
transformed  into  a  shoal  of  jelly-fish. 

All  organization  among  operators  had  been  destroy- 
ed ;  the  regular  forces  scattered  and  became  mere  guer- 
rillas who  preyed  upon  each  other. 

The  events  that  were  transpiring  on  the  American 
Bourse  during  September  and  October  were  not  slow 
in  producing  their  appropriate  effect  upon  the  markets 
of  the  Old  World. 

For  ninety  years,  the  ties  of  commercial  union  be- 
tween the  Old  and  the  New  Worlds  have  become  more 
and  more  closely  knit.  The  wonderful  growth  and 
prosperity  of  the  United  States  have  more  and  more 
strengthened  the  confidence  of  Europe  in  the  value  of 
American  securities,  until  in  1873  the  amount  of  U.S. 
bonds  and  railway  securities  held  in  foreign  hands  is 
variously  estimated  at  from  two  to  three  thousand 
millions  of  dollars.  Every  movement  in  Wall  Street 
affecting  the  value  of  these  securities,  communicated 
through  that  wonderful  commercial  nerve,  the  electric 
telegraph,  has  its  corresponding  sympathetic  move- 
ment in  London,  Amsterdam,  and  the  other  financial 
centres  of  the  Old  World. 

America  looks  to  Europe  to  lend  her  help  in  times 
of  monetary  stringency ;  indeed,  for  the  past  two  or 
three  years,  the  great  stock  operations  of  Wall  Street 


598  INSIDE   LIFE   IN  WALL   STREET. 

have  bridged  over  the  chasm  of  a  tight  monetary  mar- 
ket by  borrowing  money  from  European  bankers  on 
the  pledge  of  American  securities.  Jay  Gould,  Cor- 
nelius Vanderbilt,  William  R.  Havens,  Daniel  Drew, 
A.  B.  Stockwell,  Henry  N.  Smith,  and  others  whose 
names  have  so  often  appeared  in  the  pages  of  these 
chronicles,  have  all  sought  aid  from  this  quarter: 
some  of  these  operators  have  their  paid  agents  in  Lon- 
don to  carry  out  their  financial  schemes. 

The  fact  that  several  of  our  railways  are  actually 
controlled  by  foreign  stockholders,  has  still  more  close- 
ly blended  the  commercial  interests  of  Europe  and  the 
United  States.  The  capital  stock  of  the  Erie  Railway 
is,  most  of  it,  in  the  hands  of  our  English  banking 
house,  Bischoffsheim  &  Goldsmidt :  the  Atlantic  and 
Great  Western,  and  the  Illinois  Railroads,  also,  are 
principally  owned  and  controlled  by  English  capital- 
ists. The  enormous  operations  of  Jay  Gould  in  Erie 
Railway  stock  are  carried  on  in  London  through  his 
brokers  in  that  city. 

Hence  it  was  that,  during  all  the  dark  days  of  Sep- 
tember and  October,  '73,  the  reactionary  effect  of  the 
great  panic  in  America  upon  the  European  market, 
was  watched  with  anxiety  amounting  almost  to  agony. 

The  railroads  recently  built,  or  now  in  the  process 
of  building,  had  negotiated  large  loans  in -Germany, 
Holland,  and  England.  The  bonds  of  these  railroads 
had  depreciated  largely  in  value — some  of  them,  the 
Northern  Pacific  notably,  more  than  fifty  per  cent. 
Soon  after  the  panic  of  September,  large  sums  in  gold 
l)egan  to  be  shipped  to  New  York.  This  produced  an 
effect  upon  the  money  market  which  still  further 
depressed  American  securities. 


GOULD'S  LONDON  BROKEES.  599 

Tbe  capital  common  stock  of  the  Erie  Railway  Com- 
pany is  seventy-eight  millions  of  dollars,  at  par,  of 
which  five-sixths  is  held  abroad.  One  house,  that  of 
Bischoffsheim  &  Goldsmidt,  bankers  of  London,  hold, 
it  is  said,  more  than  five  hundred  thousand  shares. 
The  price  had  sunk  from  69  last  winter  to  53  in  Sep- 
tember, '73.  A  powerful  party,  headed  by  Jay  Gould, 
having  obtained  information  respecting  the  true  con- 
dition of  the  company,  was  striving  to  depress  the 
market  value.  Gould  was  short  of  the  stock  to  an 
enormous  amount,  both  in  the  New  York  and  the 
London  markets :  indeed,  his  short  contracts  in  the 
stock  were  rated  as  high  as  one  hundred  thousand 
shares. 

Week  by  week  the  price  of  the  shares  of  this  co- 
lossal railway  sank  down.  Late  hi  October,  Gould's 
brokers  in  London  failed.  He  had  employed  them  to 
sell  about  seventy  thousand  shares  in  the  open  market, 
and,  instead  of  selling  it,  they  assumed  the  order  and 
took  the  stock  themselves  under  the  expectation  that 
the  price  would  rise.  This  produced  a  still  further 
depression,  and  rumors  came  by  telegraph  that  Bis- 
choftsheim  &  Goldsmidt  were  in  trouble. 

It  was  a  dreary  picture  of  American  commerce  and 
finance  that  was  spread  before  the  eyes  of  Europe  on 
the  first  of  November,  1873.  The  shrinkage  in  the 
values  of  all  kinds  of  property  was  simply  enormous. 
The  following  table  shows  the  depreciation  of  a  few 
of  the  leading  railroad  stocks  dealt  in  at  the  Stock 
Exchange : 

STOCK.  SEPT.  1, '73.  Nov.  1, '73.  SHRINKAGE. 

Lake  Shore, 93  57^  .35f  per  cent 

N.  Y.  Central  &  Hudson,  -    -    -          104  79  .25     "      « 

Erie, 59£  44  .15$  «      « 


COO  INSIDE   LIFE   IN    WALL    STREET. 


STOCK.                      S 
Chicago  &  Northwestern  preferred, 
"                "          "        common, 

EPT.1,'73. 
81 

108| 
39 
92 
27 
70 
93* 
117 
70$ 
37 
90 
130 
47 
37 
100$ 
31 
104 
86J 

Nov.  1,  '71 
54 

83 

«li 

43$ 
14| 

80 
80 
44 
21$ 
65 
100 
35$ 
16$ 
79 

16* 
90 
73 

t.  SHRINKAGE 
.27      « 
.33      « 
.25f   '• 
.17$    « 
.48$   « 
.12^   - 
.36$   « 

.37      " 
.26$   " 
.15$    « 
.25     " 
.30     " 
.11$   " 
/0$   « 
.21$   " 
.14$   « 
.14      « 
.13|   - 

Kock  m  ma,  - 

Western  Union  Telegraph,     -    - 

Milwaukee  &  St  Paul  preferred,  - 
«                    "        common,  - 

Hannibal  &  St  Joseph  preferred, 
«                   "         common, 
Delaware,  Lackawana  &  Western, 
Colorado,  Chicago  &  Interior  Cen., 

Cleveland  &  Pittsburgh,    -    -    - 

An  aggregate  shrinkage  of  more  than  one  hundred  and  ten  millions  of 
dollars. 

The  other  railways  of  the  country  showed  a  depre- 
ciation of  at  least  two  hundred  millions  of  dollars 
more.  Cotton  had  shrunk  fifty  millions  in  value: 
cereals  forty  millions.  Manufacturing  and  mercantile 
interests  were  threatened  with  general  paralysis.  To 
sum  up  the  whole  appalling  aggregate,  the  taxable 
property  of  the  country  would  show  a  total  shrinkage 
of  at  least  one  thousand  millions  of  dollars. 

Day  after  day  by  the  Atlantic  cable  came  telegrams 
announcing  the  gradual  fall  in  American  securities. 
A  large  bank  in  Vienna  had  failed,  and  in  that  city  a 
semi  panic  occurred.  The  bonds  of  one  of  our  west- 
ern railways  had  fallen  thirty-four  per  cent,  in  Amster- 
dam. The  Bank  of  England,  alarmed  at  the  drain  of 
gold  from  its  vaults,  had  raised  it  rate  from  4  per  cent 


A   TERRIBLE   STRINGENCY.  601 

in  September  to  8  per  cent,  in  November,  and  yet  still 
the  drain  of  gold  went  on,  and  the  prices  of  all  Amer- 
ican securities  declined. 

Other  influences  besides  the  fear  of  a  European 
panic  now  came  in  to  deepen  the  distrust  in  Wall 
Street.  Bank  reform  began  to  be  freely  discussed. 
The  manner  in  which  money  flows  to  and  from  New 
York  has  produced  inflations  in  stocks  with  their 
corresponding  panics.  The  practice  of  paying  inter- 
est on  deposits  has  attracted  large  deposits  during  the 
Summer  months,  and  produced  a  plethora  of  money 
which  has  fostered  a  feverish  spirit  of  speculation, 
and  the  continual  flow  of  money  westward  had  pro- 
duced frequently  a  severe  stringency,  and  sometimes 
panics.  It  was  now  proposed  by  some  of  the  Associ- 
ated Banks  to  forbid  the  payment  of  interest  on  de- 
posits, and  to  refuse  to  certify  checks  unless  the  money 
was  in  the  bank.  This  was  interpreted  to  mean  a 
stoppage  in  the  current  of  stock  speculation. 

The  Brokers'  Board  itself  agitated  the  expediency 
of  fortnightly  settlements  and  the  deposit  of  margins 
in  a  Trust  Company ;  this  also  would  act  as  a  brake  to 
the  car  of  speculation.  These  measures  hung  over 
the  market  during  the  first  week  of  November,  and 
kept  it  in  a  state  of  low  fever. 

On  Friday,  the  7th  of  November,  came  the  news 
that  the  Bank  of  England  had  raised  its  rate  to  nine 
per  cent.,  and  that  Bisehoffsheim  &  Goldsmidt  would 
probably  break  within  twenty-four  hours.  Prices 
which  had  been  slowly  recoiling  from  then:  last  spring 
downwards,  again  broke ;  Erie  fell  to  35£,  New  York 
Central  to  77£,  Western  Union  to  45£.  The  "  Com- 
mittee on  Rumors  "  announced  that  several  banks  and 


602  INSIDE   LIFE   IN   WALL    STREET. 

brokerage  firms  were  on  the  eve  of  bankruptcy,  and 
predicted  that  the  Commodore,  Jay  Gould,  and  all 
other  survivors  of  the  crisis  would  soon  throw  up  the 
sponge.  Many  went  home  that  night  with  the  full 
belief  that  the  next  day  would  bring  the  news  of  a 
great  panic  in  London,  like  that  which  followed  the 
Overend  &  Gurney  failure  in  1866. 

The  great  American  panic  of  1873  had  passed  over 
the  street  in  successive  waves,  each  one  of  which  broke, 
whelming  multitudes.  Three  of  these  waves  had  bro- 
ken on  Friday,  three  Black  Fridays, — one  on  the  19th 
of  September,  one  on  the  31st  of  October,  and  one  on 
the  7th  of  November,  the  blackest  Friday  of  all,  dark- 
ened as  it  was  by  the  great  cloud  that  hung  over 
London. 

But  behind  all  this  blackness,  was  not  the  sun  of  fu- 
ture commercial  prosperity  shining  brightly  as  ever? 
Four  millions  bales  of  cotton  were  on  the  plantations 
of  the  South ;  one  thousand  millions  bushels  of  cereals 
were  in  the  graneries  of  the  West ;  the  currency  of 
the  country,  secured  by  the  pledge  of  the  National 
faith,  was  all  here ;  gold  was  pouring  in  from  Europe ; 
gold  had  fallen  to  106£  ;  specie  payments  and  a  sound 
basis  for  commerce  were  near  at  hand;  greenbacks 
were  flowing  into  the  banks  by  the  million ;  the  banks 
had  been  paying  out  currency  more  freely ;  the  mer- 
chants had  borne  the  pressure  with  wonderful  firm- 
ness, and  but  few  had  succumbed ;  some  who  had  sus- 
pended were  resuming  business;  some  of  the  great 
Wall  Street  houses  were  making  full  settlements  with 
their  creditors ;  Daniel  Drew  had  extricated  himself 
from  the  meshes  of  bankruptcy ;  the  Union  Trust  Com- 
pany would  soon  pay  in  full,  and  start  with  a  doubled 


THE   PANIC   IS    OVER  603 

capital ;  Vanderbilt,  the  Collossus  of  modern  Roads,  was 
known  to  be  buying  stocks,  and  every  capitalist  who 
had  money  to  invest  was  inquiring  whether  stocks  had 
not  yet  reached  bottom :  these  facts  were  calculated  to 
lend  encouragement  to  all  who  could  calmly  contem- 
plate the  situation.  Nevertheless,  one  thing  was  still 
lacking — confidence  !  confidence !  without  which  com- 
mercial values  are  but  as  useless  paper ! 

On  Saturday,  the  8th  of  November,  came  the  change 
hi  the  sky,  the  turn  in  the  tide.  No  more  bad  news 
from  London !  and  Erie  flew  up  to  40,  while  the  whole 
market  steadied  itself,  and  seemed  to  tremble  on  the 
rise.  Monday,  Tuesday,  Wednesday,  Thursday,  bet- 
ter and  better !  The  four  Vanderbilt  stocks,  the  old 
guard,  New  York  Central,  Lake  Shore,  Harlem,  and 
Western  Union,  mounted  in  a  strong,  steady  flight 
towards  their  old  perches ;  the  other  stocks,  each  in 
their  order  and  after  their  sort,  followed  the  van- 
guard, while  the  throng  of  buyers  and  sellers,  crying 
out  the  "  panic  is  over,"  tossed  hither  and  thither  the 
millions  of  the  market,  as  if  panics  would  be  no  more. 


We  want  Agents  everywhere  for  our  New  and  Intensely 
Interesting  New  Book, 

KIT  CARSON'S  LIFE  1  ADVENTURES, 

FROM    FACTS    NARRATED    BY    HIMSELF, 

Embracing  Events  in  the  Life-time  of  America's  Greatest  Hunter,  Trap- 
per, Scout  and  Guide,  including  Vivid  Accounts  of  the  Every  Day 
Life,  Inner  Character,  and  Peculiar  Customs  of  All 

mmm  ?e$iii§  o,r  TOI  $m  WIST. 

ALSO, 

AN  ACCURATE  DESCRIPTION  OF  THE  COUNTRY, 

Its  Condition,  Prospects,  and  Resources;  Its  Climate  and  Scenery; 

Its  Mountains,  Rivers,  Valleys,  Deserts  and  Plains,  and 

Natural  Wonders,  together  with  a 

FULL   AND    COMPLETE    HISTORY 

OF  THE 

MODOC    INDIANS    AND     THE    MODOC    WAR, 

BY 

DEWITT    O.    PETERS, 

Brevet  Lt-Colonel  and  Surgeon  U.  S.  A. 

THE  ONLY  TRUE  AND  AUTHENTIC  LIFE  AND  ADVENTURES  OF  THIS  RENOWNED 
MAN  EVER  WRITTEN,  AS  THE  FOLLOWING  TESTIMONIAL  WILL  SHOW  : 

TA.OS,    New    Mexico. 

This  is  to  certify  that  my  friend,  Dewitt  C.  Peters, 
Brevet  Hit.-Colon.el  and  Surgeon,  TJ.  S.  -A..,  is  the  only 
person  I  ever  authorized  to  write  nay  life. 


Brigadier  General  V.  S.  Vols. 


THE  GRANDEST  AND  MOST  SUCCESSFUL  NEW  BOOK  OUT. 
AGENTS    WANTED    EVERYWHERE! 

Nothing  has  been  offered  Agents,  for  years,  which  gives  them  as  good  an 
opportunity  to  engage  in  a  lucrative  business  as 


It  is  a  book  which  commends  itself  to  all,  the  Life  of  Carson,  the  greatest  hun- 
ter, trapper,  scout  and  guide  the  world  ever  saw,  being  full  of  thrilling  adven- 
tures and  incidents  which  have  no  parallel  in  history.  The  territory  over 
which  Kit  Carson  travelled  would  fully  equal  in  dimensions  nearly  all  of  the 
Empires,  Kingdoms  and  Principalities  of  Europe  combined  ;  and  the  descrip- 
tion of  this  vast  extent  of  territory,  of  the  people  which  inhabit  it,  their  habits 
and  customs,  has  never  before  appeared  in  as  truthful  and  taking  a  form  as  in 
this  book. 

We  cordially  invite  ALL  who  wish  employment  to  write  for  our  illustrated 
circulars,  with  lull  information  and  terms. 
Address 

DUSTIN,  OILMAN  &  CO., 

148  Asylum  St.,  Hartford,  Conn. 


University  of  California 

«v  CAril  ITY 


sodep    E?i:>n     :    3XON 
:    IVD    IViS 


A     000018584     3 


